Correlation Between Rhinebeck Bancorp and Orrstown Financial
Can any of the company-specific risk be diversified away by investing in both Rhinebeck Bancorp and Orrstown 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 Rhinebeck Bancorp and Orrstown Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rhinebeck Bancorp and Orrstown Financial Services, you can compare the effects of market volatilities on Rhinebeck Bancorp and Orrstown 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 Rhinebeck Bancorp with a short position of Orrstown Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rhinebeck Bancorp and Orrstown Financial.
Diversification Opportunities for Rhinebeck Bancorp and Orrstown Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rhinebeck and Orrstown is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rhinebeck Bancorp and Orrstown Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orrstown Financial 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 Orrstown Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orrstown Financial has no effect on the direction of Rhinebeck Bancorp i.e., Rhinebeck Bancorp and Orrstown Financial go up and down completely randomly.
Pair Corralation between Rhinebeck Bancorp and Orrstown Financial
Given the investment horizon of 90 days Rhinebeck Bancorp is expected to generate 0.57 times more return on investment than Orrstown Financial. However, Rhinebeck Bancorp is 1.76 times less risky than Orrstown Financial. It trades about 0.24 of its potential returns per unit of risk. Orrstown Financial Services is currently generating about 0.05 per unit of risk. If you would invest 967.00 in Rhinebeck Bancorp on November 3, 2024 and sell it today you would earn a total of 35.00 from holding Rhinebeck Bancorp or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Rhinebeck Bancorp vs. Orrstown Financial Services
Performance |
| Timeline |
| Rhinebeck Bancorp |
| Orrstown Financial |
Rhinebeck Bancorp and Orrstown Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rhinebeck Bancorp and Orrstown Financial
The main advantage of trading using opposite Rhinebeck Bancorp and Orrstown Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rhinebeck Bancorp position performs unexpectedly, Orrstown 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 Orrstown Financial will offset losses from the drop in Orrstown Financial'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 |
| Orrstown Financial vs. Home Federal Bancorp | Orrstown Financial vs. LINKBANCORP | Orrstown Financial vs. Rhinebeck Bancorp | Orrstown Financial vs. Lake Shore 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |