Correlation Between Renasant and LINKBANCORP

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

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

Diversification Opportunities for Renasant and LINKBANCORP

-0.05

Correlation Coefficient

Renasant  LINKBANCORP

Good diversification

The 3 months correlation between Renasant and LINKBANCORP is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Renasant and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Renasant 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 Renasant 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 Renasant i.e., Renasant and LINKBANCORP go up and down completely randomly.

Pair Corralation between Renasant and LINKBANCORP

Given the investment horizon of 90 days Renasant is expected to generate 1.04 times less return on investment than LINKBANCORP. But when comparing it to its historical volatility, Renasant is 1.09 times less risky than LINKBANCORP. It trades about 0.03 of its potential returns per unit of risk. LINKBANCORP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  624.00  in LINKBANCORP on December 2, 2024 and sell it today you would earn a total of  138.00  from holding LINKBANCORP or generate 22.12% return on investment over 90 days.

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

Renasant  vs.  LINKBANCORP

Renasant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Renasant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Renasant is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

LINKBANCORP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, LINKBANCORP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Renasant and LINKBANCORP

The main advantage of trading using opposite Renasant and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renasant 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 Renasant 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.