Correlation Between Oconee Federal and Village Bank

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

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

Diversification Opportunities for Oconee Federal and Village Bank

-0.83

Correlation Coefficient

Oconee Federal  Village Bank

Pay attention - limited upside

The 3 months correlation between Oconee and Village is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Federal Financial and Village Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Bank and Oconee Federal 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 Oconee Federal Financial are associated (or correlated) with Village Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Bank has no effect on the direction of Oconee Federal i.e., Oconee Federal and Village Bank go up and down completely randomly.

Pair Corralation between Oconee Federal and Village Bank

If you would invest  0.00  in Village Bank and on September 4, 2024 and sell it today you would earn a total of  7,750  from holding Village Bank and or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	2.08%
Values	Daily Returns

Oconee Federal Financial  vs.  Village Bank and

Oconee Federal Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Village Bank

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Village Bank and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady technical and fundamental indicators, Village Bank exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oconee Federal and Village Bank

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

The idea behind Oconee Federal Financial and Village Bank and 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.