Correlation Between Penns Woods and Popular
Can any of the company-specific risk be diversified away by investing in both Penns Woods and Popular 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 Penns Woods and Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penns Woods Bancorp and Popular, you can compare the effects of market volatilities on Penns Woods and Popular 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 Penns Woods with a short position of Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penns Woods and Popular.
Diversification Opportunities for Penns Woods and Popular
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Penns and Popular is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Penns Woods Bancorp and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and Penns Woods 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 Penns Woods Bancorp are associated (or correlated) with Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of Penns Woods i.e., Penns Woods and Popular go up and down completely randomly.
Pair Corralation between Penns Woods and Popular
Given the investment horizon of 90 days Penns Woods is expected to generate 1.3 times less return on investment than Popular. In addition to that, Penns Woods is 1.63 times more volatile than Popular. It trades about 0.02 of its total potential returns per unit of risk. Popular is currently generating about 0.05 per unit of volatility. If you would invest 2,406 in Popular on October 23, 2024 and sell it today you would earn a total of 17.00 from holding Popular or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penns Woods Bancorp vs. Popular
Performance |
| Timeline |
| Penns Woods Bancorp |
| Popular |
Penns Woods and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penns Woods and Popular
The main advantage of trading using opposite Penns Woods and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penns Woods position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
| Popular vs. Penns Woods Bancorp | Popular vs. 1st Source | Popular vs. Great Southern Bancorp | Popular vs. Waterstone 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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