Correlation Between Investar Holding and Peoples Bancorp

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

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

Diversification Opportunities for Investar Holding and Peoples Bancorp

0.94

Correlation Coefficient

Investar Holding  Peoples Bancorp

Almost no diversification

The 3 months correlation between Investar and Peoples is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and Peoples Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp and Investar Holding 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 Investar Holding 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 Investar Holding i.e., Investar Holding and Peoples Bancorp go up and down completely randomly.

Pair Corralation between Investar Holding and Peoples Bancorp

Given the investment horizon of 90 days Investar Holding Corp is expected to under-perform the Peoples Bancorp. In addition to that, Investar Holding is 1.21 times more volatile than Peoples Bancorp. It trades about -0.17 of its total potential returns per unit of risk. Peoples Bancorp is currently generating about -0.17 per unit of volatility. If you would invest  3,486  in Peoples Bancorp on October 20, 2024 and sell it today you would lose (356.00) from holding Peoples Bancorp or give up 10.21% of portfolio value over 90 days.

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

Investar Holding Corp  vs.  Peoples Bancorp

Investar Holding Corp

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Investar Holding Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Investar Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Peoples Bancorp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Peoples Bancorp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Investar Holding and Peoples Bancorp

The main advantage of trading using opposite Investar Holding and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding 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 Investar Holding 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.