Correlation Between CrossFirst Bankshares and Peapack Gladstone

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

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

Diversification Opportunities for CrossFirst Bankshares and Peapack Gladstone

-0.45

Correlation Coefficient

CrossFirst Bankshares  Peapack Gladstone

Very good diversification

The 3 months correlation between CrossFirst and Peapack is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CrossFirst Bankshares and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone and CrossFirst Bankshares 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 CrossFirst Bankshares are associated (or correlated) with Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of CrossFirst Bankshares i.e., CrossFirst Bankshares and Peapack Gladstone go up and down completely randomly.

Pair Corralation between CrossFirst Bankshares and Peapack Gladstone

Considering the 90-day investment horizon CrossFirst Bankshares is expected to generate 0.97 times more return on investment than Peapack Gladstone. However, CrossFirst Bankshares is 1.03 times less risky than Peapack Gladstone. It trades about 0.07 of its potential returns per unit of risk. Peapack Gladstone Financial is currently generating about -0.09 per unit of risk. If you would invest  1,522  in CrossFirst Bankshares on December 29, 2024 and sell it today you would earn a total of  77.00  from holding CrossFirst Bankshares or generate 5.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	68.85%
Values	Daily Returns

CrossFirst Bankshares  vs.  Peapack Gladstone Financial

CrossFirst Bankshares

Risk-Adjusted Performance

Modest

Over the last 90 days CrossFirst Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady technical and fundamental indicators, CrossFirst Bankshares may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Peapack Gladstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peapack Gladstone Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with CrossFirst Bankshares and Peapack Gladstone

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

The idea behind CrossFirst Bankshares and Peapack Gladstone Financial 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.