Correlation Between Park National and Old National
Can any of the company-specific risk be diversified away by investing in both Park National and Old National 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 Park National and Old National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park National and Old National Bancorp, you can compare the effects of market volatilities on Park National and Old National 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 Park National with a short position of Old National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park National and Old National.
Diversification Opportunities for Park National and Old National
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Park and Old is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Park National and Old National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old National Bancorp and Park National 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 Park National are associated (or correlated) with Old National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old National Bancorp has no effect on the direction of Park National i.e., Park National and Old National go up and down completely randomly.
Pair Corralation between Park National and Old National
Considering the 90-day investment horizon Park National is expected to generate 1.66 times less return on investment than Old National. In addition to that, Park National is 1.16 times more volatile than Old National Bancorp. It trades about 0.13 of its total potential returns per unit of risk. Old National Bancorp is currently generating about 0.25 per unit of volatility. If you would invest 1,912 in Old National Bancorp on September 2, 2024 and sell it today you would earn a total of 404.00 from holding Old National Bancorp or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park National vs. Old National Bancorp
Performance |
| Timeline |
| Park National |
| Old National Bancorp |
Park National and Old National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park National and Old National
The main advantage of trading using opposite Park National and Old National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park National position performs unexpectedly, Old National 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 National will offset losses from the drop in Old National's long position.| Park National vs. Peoples Bancorp | Park National vs. Lakeland Financial | Park National vs. NBT Bancorp | Park National vs. Trustmark |
| Old National vs. Independent Bank | Old National vs. First Financial Bancorp | Old National vs. Lakeland Financial | Old National vs. National Bank Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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