Correlation Between Oakworth Capital and Truxton

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

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

Diversification Opportunities for Oakworth Capital and Truxton

0.65

Correlation Coefficient

Oakworth Capital  Truxton

Poor diversification

The 3 months correlation between Oakworth and Truxton is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oakworth Capital and Truxton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truxton and Oakworth Capital 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 Oakworth Capital are associated (or correlated) with Truxton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truxton has no effect on the direction of Oakworth Capital i.e., Oakworth Capital and Truxton go up and down completely randomly.

Pair Corralation between Oakworth Capital and Truxton

Given the investment horizon of 90 days Oakworth Capital is expected to generate 2.84 times more return on investment than Truxton. However, Oakworth Capital is 2.84 times more volatile than Truxton. It trades about 0.06 of its potential returns per unit of risk. Truxton is currently generating about 0.07 per unit of risk. If you would invest  2,933  in Oakworth Capital on October 8, 2024 and sell it today you would earn a total of  227.00  from holding Oakworth Capital or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Oakworth Capital  vs.  Truxton

Oakworth Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oakworth Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, Oakworth Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Truxton

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Truxton are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Truxton is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oakworth Capital and Truxton

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

The idea behind Oakworth Capital and Truxton 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.