Correlation Between LINKBANCORP and FNCB Bancorp

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

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

Diversification Opportunities for LINKBANCORP and FNCB Bancorp

0.01

Correlation Coefficient

LINKBANCORP  FNCB Bancorp

Significant diversification

The 3 months correlation between LINKBANCORP and FNCB is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and FNCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNCB Bancorp 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 FNCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNCB Bancorp has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and FNCB Bancorp go up and down completely randomly.

Pair Corralation between LINKBANCORP and FNCB Bancorp

If you would invest  649.00  in LINKBANCORP on October 26, 2024 and sell it today you would earn a total of  67.00  from holding LINKBANCORP or generate 10.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

LINKBANCORP  vs.  FNCB Bancorp

LINKBANCORP

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting forward-looking signals, LINKBANCORP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

FNCB Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with LINKBANCORP and FNCB Bancorp

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

The idea behind LINKBANCORP and FNCB 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.