Correlation Between Plumas Bancorp and TrustCo Bank
Can any of the company-specific risk be diversified away by investing in both Plumas Bancorp and TrustCo Bank 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 Plumas Bancorp and TrustCo Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plumas Bancorp and TrustCo Bank Corp, you can compare the effects of market volatilities on Plumas Bancorp and TrustCo Bank 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 Plumas Bancorp with a short position of TrustCo Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumas Bancorp and TrustCo Bank.
Diversification Opportunities for Plumas Bancorp and TrustCo Bank
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plumas and TrustCo is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Plumas Bancorp and TrustCo Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrustCo Bank Corp and Plumas 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 Plumas Bancorp are associated (or correlated) with TrustCo Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrustCo Bank Corp has no effect on the direction of Plumas Bancorp i.e., Plumas Bancorp and TrustCo Bank go up and down completely randomly.
Pair Corralation between Plumas Bancorp and TrustCo Bank
Given the investment horizon of 90 days Plumas Bancorp is expected to generate 1.35 times more return on investment than TrustCo Bank. However, Plumas Bancorp is 1.35 times more volatile than TrustCo Bank Corp. It trades about 0.27 of its potential returns per unit of risk. TrustCo Bank Corp is currently generating about -0.02 per unit of risk. If you would invest 4,554 in Plumas Bancorp on September 13, 2024 and sell it today you would earn a total of 331.00 from holding Plumas Bancorp or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plumas Bancorp vs. TrustCo Bank Corp
Performance |
| Timeline |
| Plumas Bancorp |
| TrustCo Bank Corp |
Plumas Bancorp and TrustCo Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumas Bancorp and TrustCo Bank
The main advantage of trading using opposite Plumas Bancorp and TrustCo Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumas Bancorp position performs unexpectedly, TrustCo Bank 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 TrustCo Bank will offset losses from the drop in TrustCo Bank's long position.| Plumas Bancorp vs. Comerica | Plumas Bancorp vs. Truist Financial Corp | Plumas Bancorp vs. Fifth Third Bancorp | Plumas Bancorp vs. Zions Bancorporation |
| TrustCo Bank vs. Southern Missouri Bancorp | TrustCo Bank vs. IF Bancorp | TrustCo Bank vs. Colony Bankcorp | TrustCo Bank vs. Old Point Financial |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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