Correlation Between Oregon Bancorp and Commencement Bancorp

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

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

Diversification Opportunities for Oregon Bancorp and Commencement Bancorp

0.32

Correlation Coefficient

Oregon Bancorp  Commencement Bancorp

Weak diversification

The 3 months correlation between Oregon and Commencement is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oregon Bancorp and Commencement Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commencement Bancorp and Oregon Bancorp 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 Oregon Bancorp are associated (or correlated) with Commencement Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commencement Bancorp has no effect on the direction of Oregon Bancorp i.e., Oregon Bancorp and Commencement Bancorp go up and down completely randomly.

Pair Corralation between Oregon Bancorp and Commencement Bancorp

Given the investment horizon of 90 days Oregon Bancorp is expected to under-perform the Commencement Bancorp. In addition to that, Oregon Bancorp is 1.8 times more volatile than Commencement Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Commencement Bancorp is currently generating about 0.27 per unit of volatility. If you would invest  1,100  in Commencement Bancorp on October 26, 2024 and sell it today you would earn a total of  158.00  from holding Commencement Bancorp or generate 14.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Oregon Bancorp  vs.  Commencement Bancorp

Oregon Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oregon Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Oregon Bancorp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Commencement Bancorp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Commencement Bancorp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Commencement Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oregon Bancorp and Commencement Bancorp

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

The idea behind Oregon Bancorp and Commencement Bancorp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.