Correlation Between TrustCo Bank and Plumas Bancorp
Can any of the company-specific risk be diversified away by investing in both TrustCo Bank and Plumas 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 TrustCo Bank and Plumas Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrustCo Bank Corp and Plumas Bancorp, you can compare the effects of market volatilities on TrustCo Bank and Plumas 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 TrustCo Bank with a short position of Plumas Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrustCo Bank and Plumas Bancorp.
Diversification Opportunities for TrustCo Bank and Plumas Bancorp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TrustCo and Plumas is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding TrustCo Bank Corp and Plumas Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumas Bancorp and TrustCo Bank 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 TrustCo Bank Corp are associated (or correlated) with Plumas Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumas Bancorp has no effect on the direction of TrustCo Bank i.e., TrustCo Bank and Plumas Bancorp go up and down completely randomly.
Pair Corralation between TrustCo Bank and Plumas Bancorp
Given the investment horizon of 90 days TrustCo Bank Corp is expected to under-perform the Plumas Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, TrustCo Bank Corp is 1.35 times less risky than Plumas Bancorp. The stock trades about -0.02 of its potential returns per unit of risk. The Plumas Bancorp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 4,554 in Plumas Bancorp on September 13, 2024 and sell it today you would earn a total of 331.00 from holding Plumas Bancorp or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TrustCo Bank Corp vs. Plumas Bancorp
Performance |
| Timeline |
| TrustCo Bank Corp |
| Plumas Bancorp |
TrustCo Bank and Plumas Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrustCo Bank and Plumas Bancorp
The main advantage of trading using opposite TrustCo Bank and Plumas Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrustCo Bank position performs unexpectedly, Plumas 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 Plumas Bancorp will offset losses from the drop in Plumas Bancorp's long position.| TrustCo Bank vs. Southern Missouri Bancorp | TrustCo Bank vs. IF Bancorp | TrustCo Bank vs. Colony Bankcorp | TrustCo Bank vs. Old Point Financial |
| Plumas Bancorp vs. Comerica | Plumas Bancorp vs. Truist Financial Corp | Plumas Bancorp vs. Fifth Third Bancorp | Plumas Bancorp vs. Zions Bancorporation |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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