Correlation Between LINKBANCORP and Popular

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

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

Diversification Opportunities for LINKBANCORP and Popular

-0.07

Correlation Coefficient

LINKBANCORP  Popular

Good diversification

The 3 months correlation between LINKBANCORP and Popular is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Popular go up and down completely randomly.

Pair Corralation between LINKBANCORP and Popular

Given the investment horizon of 90 days LINKBANCORP is expected to generate 0.87 times more return on investment than Popular. However, LINKBANCORP is 1.16 times less risky than Popular. It trades about 0.18 of its potential returns per unit of risk. Popular is currently generating about 0.01 per unit of risk. If you would invest  608.00  in LINKBANCORP on September 2, 2024 and sell it today you would earn a total of  152.00  from holding LINKBANCORP or generate 25.0% return on investment over 90 days.

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

LINKBANCORP  vs.  Popular

LINKBANCORP

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 13 (%) 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.

Popular

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Popular has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Popular is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with LINKBANCORP and Popular

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

The idea behind LINKBANCORP and Popular 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..