Correlation Between Peoples Bancorp and Old Point
Can any of the company-specific risk be diversified away by investing in both Peoples Bancorp and Old Point 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 Peoples Bancorp and Old Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Bancorp and Old Point Financial, you can compare the effects of market volatilities on Peoples Bancorp and Old Point 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 Peoples Bancorp with a short position of Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Bancorp and Old Point.
Diversification Opportunities for Peoples Bancorp and Old Point
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Peoples and Old is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Bancorp and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial and Peoples Bancorp 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 Peoples Bancorp are associated (or correlated) with Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Peoples Bancorp i.e., Peoples Bancorp and Old Point go up and down completely randomly.
Pair Corralation between Peoples Bancorp and Old Point
Given the investment horizon of 90 days Peoples Bancorp is expected to generate 0.75 times more return on investment than Old Point. However, Peoples Bancorp is 1.33 times less risky than Old Point. It trades about 0.03 of its potential returns per unit of risk. Old Point Financial is currently generating about 0.02 per unit of risk. If you would invest 2,744 in Peoples Bancorp on November 9, 2024 and sell it today you would earn a total of 634.00 from holding Peoples Bancorp or generate 23.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Peoples Bancorp vs. Old Point Financial
Performance |
| Timeline |
| Peoples Bancorp |
| Old Point Financial |
Peoples Bancorp and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Bancorp and Old Point
The main advantage of trading using opposite Peoples Bancorp and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Bancorp position performs unexpectedly, Old Point 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 Old Point will offset losses from the drop in Old Point's long position.| Peoples Bancorp vs. Eagle Bancorp | Peoples Bancorp vs. Northrim BanCorp | Peoples Bancorp vs. United Bankshares | Peoples Bancorp vs. Pacific Premier Bancorp |
| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home Bancorp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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