Correlation Between Chia and Oregon Bancorp

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

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

Diversification Opportunities for Chia and Oregon Bancorp

0.45

Correlation Coefficient

Chia  Oregon Bancorp

Very weak diversification

The 3 months correlation between Chia and Oregon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Oregon Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oregon Bancorp and Chia 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 Chia are associated (or correlated) with Oregon Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oregon Bancorp has no effect on the direction of Chia i.e., Chia and Oregon Bancorp go up and down completely randomly.

Pair Corralation between Chia and Oregon Bancorp

Assuming the 90 days trading horizon Chia is expected to under-perform the Oregon Bancorp. In addition to that, Chia is 5.01 times more volatile than Oregon Bancorp. It trades about -0.04 of its total potential returns per unit of risk. Oregon Bancorp is currently generating about -0.13 per unit of volatility. If you would invest  2,230  in Oregon Bancorp on October 27, 2024 and sell it today you would lose (80.00) from holding Oregon Bancorp or give up 3.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Chia  vs.  Oregon Bancorp

Chia

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Chia and Oregon Bancorp

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

The idea behind Chia and Oregon 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.