Correlation Between Rhinebeck Bancorp and Ames National
Can any of the company-specific risk be diversified away by investing in both Rhinebeck Bancorp and Ames 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 Rhinebeck Bancorp and Ames National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rhinebeck Bancorp and Ames National, you can compare the effects of market volatilities on Rhinebeck Bancorp and Ames 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 Rhinebeck Bancorp with a short position of Ames National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rhinebeck Bancorp and Ames National.
Diversification Opportunities for Rhinebeck Bancorp and Ames National
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rhinebeck and Ames is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Rhinebeck Bancorp and Ames National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ames National and Rhinebeck 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 Rhinebeck Bancorp are associated (or correlated) with Ames National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ames National has no effect on the direction of Rhinebeck Bancorp i.e., Rhinebeck Bancorp and Ames National go up and down completely randomly.
Pair Corralation between Rhinebeck Bancorp and Ames National
Given the investment horizon of 90 days Rhinebeck Bancorp is expected to generate 0.35 times more return on investment than Ames National. However, Rhinebeck Bancorp is 2.82 times less risky than Ames National. It trades about 0.4 of its potential returns per unit of risk. Ames National is currently generating about 0.01 per unit of risk. If you would invest 909.00 in Rhinebeck Bancorp on August 30, 2024 and sell it today you would earn a total of 72.00 from holding Rhinebeck Bancorp or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rhinebeck Bancorp vs. Ames National
Performance |
| Timeline |
| Rhinebeck Bancorp |
| Ames National |
Rhinebeck Bancorp and Ames National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rhinebeck Bancorp and Ames National
The main advantage of trading using opposite Rhinebeck Bancorp and Ames National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rhinebeck Bancorp position performs unexpectedly, Ames 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 Ames National will offset losses from the drop in Ames National's long position.| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
| Ames National vs. First Community | Ames National vs. Old Point Financial | Ames National vs. Oak Valley Bancorp | Ames National vs. Chemung Financial Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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