Correlation Between Rhinebeck Bancorp and Jeffersonville Bancorp
Can any of the company-specific risk be diversified away by investing in both Rhinebeck Bancorp and Jeffersonville 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 Rhinebeck Bancorp and Jeffersonville Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rhinebeck Bancorp and Jeffersonville Bancorp, you can compare the effects of market volatilities on Rhinebeck Bancorp and Jeffersonville 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 Rhinebeck Bancorp with a short position of Jeffersonville Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rhinebeck Bancorp and Jeffersonville Bancorp.
Diversification Opportunities for Rhinebeck Bancorp and Jeffersonville Bancorp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rhinebeck and Jeffersonville is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rhinebeck Bancorp and Jeffersonville Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffersonville Bancorp 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 Jeffersonville Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffersonville Bancorp has no effect on the direction of Rhinebeck Bancorp i.e., Rhinebeck Bancorp and Jeffersonville Bancorp go up and down completely randomly.
Pair Corralation between Rhinebeck Bancorp and Jeffersonville Bancorp
Given the investment horizon of 90 days Rhinebeck Bancorp is expected to generate 0.87 times more return on investment than Jeffersonville Bancorp. However, Rhinebeck Bancorp is 1.15 times less risky than Jeffersonville Bancorp. It trades about 0.01 of its potential returns per unit of risk. Jeffersonville Bancorp is currently generating about -0.02 per unit of risk. If you would invest 935.00 in Rhinebeck Bancorp on August 30, 2024 and sell it today you would earn a total of 46.00 from holding Rhinebeck Bancorp or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Rhinebeck Bancorp vs. Jeffersonville Bancorp
Performance |
| Timeline |
| Rhinebeck Bancorp |
| Jeffersonville Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rhinebeck Bancorp and Jeffersonville Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rhinebeck Bancorp and Jeffersonville Bancorp
The main advantage of trading using opposite Rhinebeck Bancorp and Jeffersonville Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rhinebeck Bancorp position performs unexpectedly, Jeffersonville 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 Jeffersonville Bancorp will offset losses from the drop in Jeffersonville Bancorp'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 |
| Jeffersonville Bancorp vs. Heritage NOLA Bancorp | Jeffersonville Bancorp vs. Rhinebeck Bancorp | Jeffersonville Bancorp vs. Bridgewater Bancshares Depositary | Jeffersonville Bancorp vs. Bank of Marin |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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