Correlation Between Berkshire Hills and Old Point

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

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

Diversification Opportunities for Berkshire Hills and Old Point

-0.87

Correlation Coefficient

Berkshire Hills  Old Point

Pay attention - limited upside

The 3 months correlation between Berkshire and Old is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and Old Point go up and down completely randomly.

Pair Corralation between Berkshire Hills and Old Point

Given the investment horizon of 90 days Berkshire Hills Bancorp is expected to under-perform the Old Point. But the stock apears to be less risky and, when comparing its historical volatility, Berkshire Hills Bancorp is 1.76 times less risky than Old Point. The stock trades about -0.15 of its potential returns per unit of risk. The Old Point Financial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,498  in Old Point Financial on January 17, 2025 and sell it today you would earn a total of  1,312  from holding Old Point Financial or generate 52.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Berkshire Hills Bancorp  vs.  Old Point Financial

Berkshire Hills Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Berkshire Hills Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Old Point Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Point Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Old Point reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkshire Hills and Old Point

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

The idea behind Berkshire Hills Bancorp and Old Point 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.