Correlation Between Richmond Mutual and Oconee Federal

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

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

Diversification Opportunities for Richmond Mutual and Oconee Federal

0.0

Correlation Coefficient

Richmond Mutual  Oconee Federal

Pay attention - limited upside

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

Pair Corralation between Richmond Mutual and Oconee Federal

If you would invest (100.00) in Oconee Federal Financial on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Oconee Federal Financial or generate -100.0% return on investment over 90 days.

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

Richmond Mutual Bancorp.  vs.  Oconee Federal Financial

Richmond Mutual Banc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Richmond Mutual Bancorporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Richmond Mutual is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Oconee Federal Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oconee Federal Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Oconee Federal is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Richmond Mutual and Oconee Federal

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

The idea behind Richmond Mutual Bancorporation and Oconee Federal Financial 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.