Correlation Between Peapack Gladstone and Flushing Financial
Can any of the company-specific risk be diversified away by investing in both Peapack Gladstone and Flushing 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 Peapack Gladstone and Flushing Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peapack Gladstone Financial and Flushing Financial, you can compare the effects of market volatilities on Peapack Gladstone and Flushing 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 Peapack Gladstone with a short position of Flushing Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peapack Gladstone and Flushing Financial.
Diversification Opportunities for Peapack Gladstone and Flushing Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Peapack and Flushing is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Peapack Gladstone Financial and Flushing Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flushing Financial and Peapack Gladstone 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 Peapack Gladstone Financial are associated (or correlated) with Flushing Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flushing Financial has no effect on the direction of Peapack Gladstone i.e., Peapack Gladstone and Flushing Financial go up and down completely randomly.
Pair Corralation between Peapack Gladstone and Flushing Financial
Considering the 90-day investment horizon Peapack Gladstone is expected to generate 1.81 times less return on investment than Flushing Financial. But when comparing it to its historical volatility, Peapack Gladstone Financial is 1.19 times less risky than Flushing Financial. It trades about 0.01 of its potential returns per unit of risk. Flushing Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,417 in Flushing Financial on December 4, 2024 and sell it today you would lose (39.00) from holding Flushing Financial or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peapack Gladstone Financial vs. Flushing Financial
Performance |
| Timeline |
| Peapack Gladstone |
| Flushing Financial |
Peapack Gladstone and Flushing Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peapack Gladstone and Flushing Financial
The main advantage of trading using opposite Peapack Gladstone and Flushing Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peapack Gladstone position performs unexpectedly, Flushing 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 Flushing Financial will offset losses from the drop in Flushing Financial's long position.| Peapack Gladstone vs. Sound Financial Bancorp | ||
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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