Correlation Between Parkway Acquisition and First Ottawa
Can any of the company-specific risk be diversified away by investing in both Parkway Acquisition and First Ottawa 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 Parkway Acquisition and First Ottawa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkway Acquisition Corp and First Ottawa Bancshares, you can compare the effects of market volatilities on Parkway Acquisition and First Ottawa 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 Parkway Acquisition with a short position of First Ottawa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkway Acquisition and First Ottawa.
Diversification Opportunities for Parkway Acquisition and First Ottawa
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Parkway and First is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Parkway Acquisition Corp and First Ottawa Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ottawa Bancshares and Parkway Acquisition 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 Parkway Acquisition Corp are associated (or correlated) with First Ottawa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ottawa Bancshares has no effect on the direction of Parkway Acquisition i.e., Parkway Acquisition and First Ottawa go up and down completely randomly.
Pair Corralation between Parkway Acquisition and First Ottawa
If you would invest 13,000 in First Ottawa Bancshares on November 2, 2024 and sell it today you would earn a total of 1,500 from holding First Ottawa Bancshares or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Parkway Acquisition Corp vs. First Ottawa Bancshares
Performance |
| Timeline |
| Parkway Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Ottawa Bancshares |
Parkway Acquisition and First Ottawa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkway Acquisition and First Ottawa
The main advantage of trading using opposite Parkway Acquisition and First Ottawa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkway Acquisition position performs unexpectedly, First Ottawa 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 First Ottawa will offset losses from the drop in First Ottawa's long position.| Parkway Acquisition vs. First Bankers Trustshares | Parkway Acquisition vs. Greenville Federal Financial | Parkway Acquisition vs. First Ottawa Bancshares | Parkway Acquisition vs. Coastal Carolina Bancshares |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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