Correlation Between Juniata Valley and Pinnacle Bancshares

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

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

Diversification Opportunities for Juniata Valley and Pinnacle Bancshares

0.0

Correlation Coefficient

Juniata Valley  Pinnacle Bancshares

Pay attention - limited upside

The 3 months correlation between Juniata and Pinnacle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Pinnacle Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bancshares and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with Pinnacle Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bancshares has no effect on the direction of Juniata Valley i.e., Juniata Valley and Pinnacle Bancshares go up and down completely randomly.

Pair Corralation between Juniata Valley and Pinnacle Bancshares

If you would invest (100.00) in Pinnacle Bancshares on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Pinnacle Bancshares or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Juniata Valley Financial  vs.  Pinnacle Bancshares

Juniata Valley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniata Valley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pinnacle Bancshares

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Juniata Valley and Pinnacle Bancshares

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

The idea behind Juniata Valley Financial and Pinnacle Bancshares 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.