Correlation Between Old Point and CVCY Old

Can any of the company-specific risk be diversified away by investing in both Old Point and CVCY Old 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 CVCY Old 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 CVCY Old, you can compare the effects of market volatilities on Old Point and CVCY Old 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 CVCY Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and CVCY Old.

Diversification Opportunities for Old Point and CVCY Old

0.0

Correlation Coefficient

Old Point  CVCY Old

Pay attention - limited upside

The 3 months correlation between Old and CVCY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and CVCY Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVCY Old 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 CVCY Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVCY Old has no effect on the direction of Old Point i.e., Old Point and CVCY Old go up and down completely randomly.

Pair Corralation between Old Point and CVCY Old

If you would invest  2,503  in Old Point Financial on December 27, 2024 and sell it today you would earn a total of  499.00  from holding Old Point Financial or generate 19.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Old Point Financial  vs.  CVCY Old

Old Point Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Point Financial are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Old Point reported solid returns over the last few months and may actually be approaching a breakup point.

CVCY Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CVCY Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, CVCY Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Old Point and CVCY Old

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

The idea behind Old Point Financial and CVCY Old 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.