Correlation Between Penns Woods and Cambridge Bancorp
Can any of the company-specific risk be diversified away by investing in both Penns Woods and Cambridge Bancorp 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 Cambridge Bancorp 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 Cambridge Bancorp, you can compare the effects of market volatilities on Penns Woods and Cambridge Bancorp 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 Cambridge Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penns Woods and Cambridge Bancorp.
Diversification Opportunities for Penns Woods and Cambridge Bancorp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penns and Cambridge is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Penns Woods Bancorp and Cambridge Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambridge Bancorp 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 Cambridge Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambridge Bancorp has no effect on the direction of Penns Woods i.e., Penns Woods and Cambridge Bancorp go up and down completely randomly.
Pair Corralation between Penns Woods and Cambridge Bancorp
If you would invest 2,262 in Penns Woods Bancorp on August 28, 2024 and sell it today you would earn a total of 857.00 from holding Penns Woods Bancorp or generate 37.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 1.59% |
| Values | Daily Returns |
Penns Woods Bancorp vs. Cambridge Bancorp
Performance |
| Timeline |
| Penns Woods Bancorp |
| Cambridge Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Penns Woods and Cambridge Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penns Woods and Cambridge Bancorp
The main advantage of trading using opposite Penns Woods and Cambridge Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penns Woods position performs unexpectedly, Cambridge Bancorp 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 Cambridge Bancorp will offset losses from the drop in Cambridge Bancorp's long position.| Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
| Cambridge Bancorp vs. First Community | Cambridge Bancorp vs. Community West Bancshares | Cambridge Bancorp vs. First Financial Northwest | Cambridge Bancorp vs. First Northwest Bancorp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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