Correlation Between PrimeEnergy and ACNB

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

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

Diversification Opportunities for PrimeEnergy and ACNB

-0.17

Correlation Coefficient

PrimeEnergy  ACNB

Good diversification

The 3 months correlation between PrimeEnergy and ACNB is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PrimeEnergy and ACNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACNB and PrimeEnergy 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 PrimeEnergy are associated (or correlated) with ACNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACNB has no effect on the direction of PrimeEnergy i.e., PrimeEnergy and ACNB go up and down completely randomly.

Pair Corralation between PrimeEnergy and ACNB

Given the investment horizon of 90 days PrimeEnergy is expected to generate 2.43 times less return on investment than ACNB. In addition to that, PrimeEnergy is 1.67 times more volatile than ACNB Corporation. It trades about 0.01 of its total potential returns per unit of risk. ACNB Corporation is currently generating about 0.06 per unit of volatility. If you would invest  3,884  in ACNB Corporation on December 29, 2024 and sell it today you would earn a total of  222.00  from holding ACNB Corporation or generate 5.72% return on investment over 90 days.

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

PrimeEnergy  vs.  ACNB Corp.

PrimeEnergy

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PrimeEnergy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PrimeEnergy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

ACNB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ACNB Corporation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACNB may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PrimeEnergy and ACNB

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

The idea behind PrimeEnergy and ACNB Corporation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..