Correlation Between FNB Corp and Peoples Bancorp

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

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

Diversification Opportunities for FNB Corp and Peoples Bancorp

0.98

Correlation Coefficient

FNB Corp  Peoples Bancorp

Almost no diversification

The 3 months correlation between FNB and Peoples is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp and Peoples Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp and FNB Corp 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 FNB Corp are associated (or correlated) with Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of FNB Corp i.e., FNB Corp and Peoples Bancorp go up and down completely randomly.

Pair Corralation between FNB Corp and Peoples Bancorp

Considering the 90-day investment horizon FNB Corp is expected to generate 1.0 times more return on investment than Peoples Bancorp. However, FNB Corp is 1.0 times less risky than Peoples Bancorp. It trades about 0.06 of its potential returns per unit of risk. Peoples Bancorp is currently generating about 0.06 per unit of risk. If you would invest  1,062  in FNB Corp on October 4, 2024 and sell it today you would earn a total of  416.00  from holding FNB Corp or generate 39.17% return on investment over 90 days.

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

FNB Corp  vs.  Peoples Bancorp

FNB Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FNB Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, FNB Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Peoples Bancorp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Peoples Bancorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FNB Corp and Peoples Bancorp

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

The idea behind FNB Corp and Peoples 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.