Correlation Between William Penn and OptimumBank Holdings
Can any of the company-specific risk be diversified away by investing in both William Penn and OptimumBank Holdings 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 William Penn and OptimumBank Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Penn Bancorp and OptimumBank Holdings, you can compare the effects of market volatilities on William Penn and OptimumBank Holdings 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 William Penn with a short position of OptimumBank Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Penn and OptimumBank Holdings.
Diversification Opportunities for William Penn and OptimumBank Holdings
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between William and OptimumBank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and OptimumBank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptimumBank Holdings and William Penn 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 William Penn Bancorp are associated (or correlated) with OptimumBank Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptimumBank Holdings has no effect on the direction of William Penn i.e., William Penn and OptimumBank Holdings go up and down completely randomly.
Pair Corralation between William Penn and OptimumBank Holdings
Given the investment horizon of 90 days William Penn Bancorp is expected to under-perform the OptimumBank Holdings. But the stock apears to be less risky and, when comparing its historical volatility, William Penn Bancorp is 1.52 times less risky than OptimumBank Holdings. The stock trades about -0.1 of its potential returns per unit of risk. The OptimumBank Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 505.00 in OptimumBank Holdings on September 13, 2024 and sell it today you would lose (11.00) from holding OptimumBank Holdings or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Penn Bancorp vs. OptimumBank Holdings
Performance |
| Timeline |
| William Penn Bancorp |
| OptimumBank Holdings |
William Penn and OptimumBank Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Penn and OptimumBank Holdings
The main advantage of trading using opposite William Penn and OptimumBank Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn position performs unexpectedly, OptimumBank Holdings 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 OptimumBank Holdings will offset losses from the drop in OptimumBank Holdings' long position.| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
| OptimumBank Holdings vs. First National Bank | OptimumBank Holdings vs. TrustCo Bank Corp | OptimumBank Holdings vs. Inter Co Class | OptimumBank Holdings vs. Rhinebeck 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world |