Correlation Between Peapack Gladstone and LINKBANCORP

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

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

Diversification Opportunities for Peapack Gladstone and LINKBANCORP

0.73

Correlation Coefficient

Peapack Gladstone  LINKBANCORP

Poor diversification

The 3 months correlation between Peapack and LINKBANCORP is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Peapack Gladstone Financial and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Peapack Gladstone 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 Peapack Gladstone Financial are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of Peapack Gladstone i.e., Peapack Gladstone and LINKBANCORP go up and down completely randomly.

Pair Corralation between Peapack Gladstone and LINKBANCORP

Considering the 90-day investment horizon Peapack Gladstone Financial is expected to under-perform the LINKBANCORP. In addition to that, Peapack Gladstone is 1.0 times more volatile than LINKBANCORP. It trades about -0.09 of its total potential returns per unit of risk. LINKBANCORP is currently generating about -0.05 per unit of volatility. If you would invest  743.00  in LINKBANCORP on December 30, 2024 and sell it today you would lose (53.00) from holding LINKBANCORP or give up 7.13% of portfolio value over 90 days.

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

Peapack Gladstone Financial  vs.  LINKBANCORP

Peapack Gladstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peapack Gladstone Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

LINKBANCORP

Risk-Adjusted Performance

Very Weak

Over the last 90 days LINKBANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Peapack Gladstone and LINKBANCORP

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

The idea behind Peapack Gladstone Financial and LINKBANCORP 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.