Correlation Between ESSA Bancorp and Origin Bancorp,

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

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

Diversification Opportunities for ESSA Bancorp and Origin Bancorp,

0.93

Correlation Coefficient

ESSA Bancorp  Origin Bancorp,

Almost no diversification

The 3 months correlation between ESSA and Origin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ESSA Bancorp and Origin Bancorp, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Bancorp, and ESSA Bancorp 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 ESSA Bancorp are associated (or correlated) with Origin Bancorp,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Bancorp, has no effect on the direction of ESSA Bancorp i.e., ESSA Bancorp and Origin Bancorp, go up and down completely randomly.

Pair Corralation between ESSA Bancorp and Origin Bancorp,

Given the investment horizon of 90 days ESSA Bancorp is expected to under-perform the Origin Bancorp,. But the stock apears to be less risky and, when comparing its historical volatility, ESSA Bancorp is 1.31 times less risky than Origin Bancorp,. The stock trades about 0.0 of its potential returns per unit of risk. The Origin Bancorp, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,265  in Origin Bancorp, on December 19, 2024 and sell it today you would earn a total of  288.00  from holding Origin Bancorp, or generate 8.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ESSA Bancorp  vs.  Origin Bancorp,

ESSA Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ESSA Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ESSA Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Origin Bancorp,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Bancorp, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent fundamental drivers, Origin Bancorp, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ESSA Bancorp and Origin Bancorp,

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

The idea behind ESSA Bancorp and Origin Bancorp, 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 Commodity Directory module to find actively traded commodities issued by global exchanges.