Correlation Between Oak Valley and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Oak Valley and Waterstone Financial 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 Waterstone Financial 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 Waterstone Financial, you can compare the effects of market volatilities on Oak Valley and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Valley and Waterstone Financial.
Diversification Opportunities for Oak Valley and Waterstone Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oak and Waterstone is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Oak Valley i.e., Oak Valley and Waterstone Financial go up and down completely randomly.
Pair Corralation between Oak Valley and Waterstone Financial
Given the investment horizon of 90 days Oak Valley is expected to generate 1.67 times less return on investment than Waterstone Financial. In addition to that, Oak Valley is 1.1 times more volatile than Waterstone Financial. It trades about 0.02 of its total potential returns per unit of risk. Waterstone Financial is currently generating about 0.04 per unit of volatility. If you would invest 1,356 in Waterstone Financial on August 25, 2024 and sell it today you would earn a total of 182.00 from holding Waterstone Financial or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oak Valley Bancorp vs. Waterstone Financial
Performance |
| Timeline |
| Oak Valley Bancorp |
| Waterstone Financial |
Oak Valley and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Valley and Waterstone Financial
The main advantage of trading using opposite Oak Valley and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Valley position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Oak Valley vs. Home Federal Bancorp | Oak Valley vs. Lake Shore Bancorp | Oak Valley vs. Community West Bancshares | Oak Valley vs. Magyar Bancorp |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| CEOs Directory Screen CEOs from public companies around the world |