Correlation Between LINKBANCORP and MVB Financial

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

By analyzing existing cross correlation between LINKBANCORP and MVB Financial Corp, you can compare the effects of market volatilities on LINKBANCORP and MVB Financial 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 MVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINKBANCORP and MVB Financial.

Diversification Opportunities for LINKBANCORP and MVB Financial

0.69

Correlation Coefficient

LINKBANCORP  MVB Financial

Poor diversification

The 3 months correlation between LINKBANCORP and MVB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and MVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MVB Financial Corp 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 MVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MVB Financial Corp has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and MVB Financial go up and down completely randomly.

Pair Corralation between LINKBANCORP and MVB Financial

Given the investment horizon of 90 days LINKBANCORP is expected to generate 1.45 times less return on investment than MVB Financial. But when comparing it to its historical volatility, LINKBANCORP is 2.03 times less risky than MVB Financial. It trades about 0.23 of its potential returns per unit of risk. MVB Financial Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,874  in MVB Financial Corp on September 5, 2024 and sell it today you would earn a total of  285.00  from holding MVB Financial Corp or generate 15.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

LINKBANCORP  vs.  MVB Financial Corp

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 unsteady forward-looking signals, LINKBANCORP sustained solid returns over the last few months and may actually be approaching a breakup point.

MVB Financial Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MVB Financial Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, MVB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with LINKBANCORP and MVB Financial

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

The idea behind LINKBANCORP and MVB Financial Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.