Correlation Between Oakley Capital and Bankers Investment

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

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

Diversification Opportunities for Oakley Capital and Bankers Investment

0.01

Correlation Coefficient

Oakley Capital  Bankers Investment

Significant diversification

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

Pair Corralation between Oakley Capital and Bankers Investment

Assuming the 90 days trading horizon Oakley Capital Investments is expected to under-perform the Bankers Investment. But the stock apears to be less risky and, when comparing its historical volatility, Oakley Capital Investments is 1.65 times less risky than Bankers Investment. The stock trades about -0.13 of its potential returns per unit of risk. The Bankers Investment Trust is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  11,459  in Bankers Investment Trust on December 30, 2024 and sell it today you would lose (279.00) from holding Bankers Investment Trust or give up 2.43% of portfolio value over 90 days.

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

Oakley Capital Investments  vs.  Bankers Investment Trust

Oakley Capital Inves

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oakley Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oakley Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bankers Investment Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bankers Investment Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Bankers Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Oakley Capital and Bankers Investment

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

The idea behind Oakley Capital Investments and Bankers Investment Trust 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.

Check out your portfolio center.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.