Correlation Between Old Point and Bank of the

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

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

Diversification Opportunities for Old Point and Bank of the

-0.33

Correlation Coefficient

Old Point  Bank of the

Very good diversification

The 3 months correlation between Old and Bank is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and Old Point 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 Old Point Financial are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of Old Point i.e., Old Point and Bank of the go up and down completely randomly.

Pair Corralation between Old Point and Bank of the

Given the investment horizon of 90 days Old Point Financial is expected to generate 1.12 times more return on investment than Bank of the. However, Old Point is 1.12 times more volatile than Bank of the. It trades about 0.03 of its potential returns per unit of risk. Bank of the is currently generating about 0.02 per unit of risk. If you would invest  2,419  in Old Point Financial on December 2, 2024 and sell it today you would earn a total of  650.00  from holding Old Point Financial or generate 26.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Old Point Financial  vs.  Bank of the

Old Point Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Point Financial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Old Point reported solid returns over the last few months and may actually be approaching a breakup point.

Bank of the

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of the has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively steady which may send shares a bit higher in April 2025. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Pair Trading with Old Point and Bank of the

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

The idea behind Old Point Financial and Bank of the 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.