Correlation Between ACNB and PrimeEnergy

Can any of the company-specific risk be diversified away by investing in both ACNB and PrimeEnergy 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 ACNB and PrimeEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACNB Corporation and PrimeEnergy, you can compare the effects of market volatilities on ACNB and PrimeEnergy 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 ACNB with a short position of PrimeEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and PrimeEnergy.

Diversification Opportunities for ACNB and PrimeEnergy

-0.17

Correlation Coefficient

ACNB  PrimeEnergy

Good diversification

The 3 months correlation between ACNB and PrimeEnergy is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and PrimeEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PrimeEnergy and ACNB 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 ACNB Corporation are associated (or correlated) with PrimeEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PrimeEnergy has no effect on the direction of ACNB i.e., ACNB and PrimeEnergy go up and down completely randomly.

Pair Corralation between ACNB and PrimeEnergy

Given the investment horizon of 90 days ACNB Corporation is expected to generate 0.6 times more return on investment than PrimeEnergy. However, ACNB Corporation is 1.67 times less risky than PrimeEnergy. It trades about 0.06 of its potential returns per unit of risk. PrimeEnergy is currently generating about 0.01 per unit of risk. If you would invest  3,884  in ACNB Corporation on December 29, 2024 and sell it today you would earn a total of  222.00  from holding ACNB Corporation or generate 5.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ACNB Corp.  vs.  PrimeEnergy

ACNB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ACNB Corporation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACNB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PrimeEnergy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PrimeEnergy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PrimeEnergy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ACNB and PrimeEnergy

The main advantage of trading using opposite ACNB and PrimeEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB position performs unexpectedly, PrimeEnergy 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 PrimeEnergy will offset losses from the drop in PrimeEnergy's long position.

The idea behind ACNB Corporation and PrimeEnergy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.