Correlation Between Oak Valley and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Oak Valley and Parke Bancorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Oak Valley and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Valley Bancorp and Parke Bancorp, you can compare the effects of market volatilities on Oak Valley and Parke Bancorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Oak Valley with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Valley and Parke Bancorp.
Diversification Opportunities for Oak Valley and Parke Bancorp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oak and Parke is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Oak Valley is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Oak Valley Bancorp are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Oak Valley i.e., Oak Valley and Parke Bancorp go up and down completely randomly.
Pair Corralation between Oak Valley and Parke Bancorp
Given the investment horizon of 90 days Oak Valley Bancorp is expected to generate 1.32 times more return on investment than Parke Bancorp. However, Oak Valley is 1.32 times more volatile than Parke Bancorp. It trades about 0.26 of its potential returns per unit of risk. Parke Bancorp is currently generating about 0.28 per unit of risk. If you would invest 2,719 in Oak Valley Bancorp on August 29, 2024 and sell it today you would earn a total of 378.00 from holding Oak Valley Bancorp or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Valley Bancorp vs. Parke Bancorp
Performance |
| Timeline |
| Oak Valley Bancorp |
| Parke Bancorp |
Oak Valley and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Valley and Parke Bancorp
The main advantage of trading using opposite Oak Valley and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Valley position performs unexpectedly, Parke Bancorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Oak Valley vs. Fifth Third Bancorp | Oak Valley vs. Huntington Bancshares Incorporated | Oak Valley vs. MT Bank |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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