Correlation Between PSB Holdings and Oconee Financial
Can any of the company-specific risk be diversified away by investing in both PSB Holdings and Oconee 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 PSB Holdings and Oconee Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PSB Holdings and Oconee Financial, you can compare the effects of market volatilities on PSB Holdings and Oconee 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 PSB Holdings with a short position of Oconee Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSB Holdings and Oconee Financial.
Diversification Opportunities for PSB Holdings and Oconee Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PSB and Oconee is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PSB Holdings and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial and PSB Holdings 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 PSB Holdings are associated (or correlated) with Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of PSB Holdings i.e., PSB Holdings and Oconee Financial go up and down completely randomly.
Pair Corralation between PSB Holdings and Oconee Financial
Given the investment horizon of 90 days PSB Holdings is expected to generate 7.12 times more return on investment than Oconee Financial. However, PSB Holdings is 7.12 times more volatile than Oconee Financial. It trades about 0.25 of its potential returns per unit of risk. Oconee Financial is currently generating about 0.29 per unit of risk. If you would invest 2,490 in PSB Holdings on August 26, 2024 and sell it today you would earn a total of 300.00 from holding PSB Holdings or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PSB Holdings vs. Oconee Financial
Performance |
| Timeline |
| PSB Holdings |
| Oconee Financial |
PSB Holdings and Oconee Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PSB Holdings and Oconee Financial
The main advantage of trading using opposite PSB Holdings and Oconee Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSB Holdings position performs unexpectedly, Oconee 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 Oconee Financial will offset losses from the drop in Oconee Financial's long position.| PSB Holdings vs. Invesco High Income | PSB Holdings vs. Blackrock Muniholdings Ny | PSB Holdings vs. MFS Investment Grade | PSB Holdings vs. Federated Premier Municipal |
| Oconee Financial vs. PSB Holdings | Oconee Financial vs. United Overseas Bank | Oconee Financial vs. Turkiye Garanti Bankasi |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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