Correlation Between Greenville Federal and Oak Ridge

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

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

Diversification Opportunities for Greenville Federal and Oak Ridge

0.23

Correlation Coefficient

Greenville Federal  Oak Ridge

Modest diversification

The 3 months correlation between Greenville and Oak is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial and Oak Ridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Ridge Financial and Greenville Federal 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 Greenville Federal Financial are associated (or correlated) with Oak Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Ridge Financial has no effect on the direction of Greenville Federal i.e., Greenville Federal and Oak Ridge go up and down completely randomly.

Pair Corralation between Greenville Federal and Oak Ridge

Given the investment horizon of 90 days Greenville Federal is expected to generate 2.7 times less return on investment than Oak Ridge. In addition to that, Greenville Federal is 1.04 times more volatile than Oak Ridge Financial. It trades about 0.02 of its total potential returns per unit of risk. Oak Ridge Financial is currently generating about 0.06 per unit of volatility. If you would invest  2,058  in Oak Ridge Financial on December 29, 2024 and sell it today you would earn a total of  42.00  from holding Oak Ridge Financial or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Greenville Federal Financial  vs.  Oak Ridge Financial

Greenville Federal

Risk-Adjusted Performance

Weak

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

Oak Ridge Financial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oak Ridge Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Oak Ridge is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Greenville Federal and Oak Ridge

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

The idea behind Greenville Federal Financial and Oak Ridge 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.