Correlation Between Community Financial and Penns Woods
Can any of the company-specific risk be diversified away by investing in both Community Financial and Penns Woods 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 Community Financial and Penns Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Community Financial Corp and Penns Woods Bancorp, you can compare the effects of market volatilities on Community Financial and Penns Woods 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 Community Financial with a short position of Penns Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Community Financial and Penns Woods.
Diversification Opportunities for Community Financial and Penns Woods
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Community and Penns is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Community Financial Corp and Penns Woods Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penns Woods Bancorp and Community Financial 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 Community Financial Corp are associated (or correlated) with Penns Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penns Woods Bancorp has no effect on the direction of Community Financial i.e., Community Financial and Penns Woods go up and down completely randomly.
Pair Corralation between Community Financial and Penns Woods
If you would invest 2,677 in Penns Woods Bancorp on September 3, 2024 and sell it today you would earn a total of 551.00 from holding Penns Woods Bancorp or generate 20.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 5.0% |
Values | Daily Returns |
Community Financial Corp vs. Penns Woods Bancorp
Performance |
Timeline |
Community Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Penns Woods Bancorp |
Community Financial and Penns Woods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Community Financial and Penns Woods
The main advantage of trading using opposite Community Financial and Penns Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Community Financial position performs unexpectedly, Penns Woods 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 Penns Woods will offset losses from the drop in Penns Woods' long position.Community Financial vs. Southern Missouri Bancorp | Community Financial vs. Western New England | Community Financial vs. First Community | Community Financial vs. SB Financial Group |
Penns Woods vs. 1st Source | Penns Woods vs. Great Southern Bancorp | Penns Woods vs. Waterstone Financial | Penns Woods vs. First Community |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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