Correlation Between Guaranty Bancshares, and LINKBANCORP

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

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

Diversification Opportunities for Guaranty Bancshares, and LINKBANCORP

0.82

Correlation Coefficient

Guaranty Bancshares,  LINKBANCORP

Very poor diversification

The 3 months correlation between Guaranty and LINKBANCORP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Bancshares, and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Guaranty Bancshares, 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 Guaranty Bancshares, are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Guaranty Bancshares, i.e., Guaranty Bancshares, and LINKBANCORP go up and down completely randomly.

Pair Corralation between Guaranty Bancshares, and LINKBANCORP

Given the investment horizon of 90 days Guaranty Bancshares, is expected to generate 0.96 times more return on investment than LINKBANCORP. However, Guaranty Bancshares, is 1.04 times less risky than LINKBANCORP. It trades about 0.02 of its potential returns per unit of risk. LINKBANCORP is currently generating about 0.0 per unit of risk. If you would invest  3,280  in Guaranty Bancshares, on September 20, 2024 and sell it today you would earn a total of  158.00  from holding Guaranty Bancshares, or generate 4.82% return on investment over 90 days.

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

Guaranty Bancshares,  vs.  LINKBANCORP

Guaranty Bancshares,

Risk-Adjusted Performance

4 of 100

Insignificant

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

LINKBANCORP

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting forward-looking signals, LINKBANCORP sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guaranty Bancshares, and LINKBANCORP

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

The idea behind Guaranty Bancshares, and LINKBANCORP 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.