Correlation Between Dime Community and Peapack Gladstone

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

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

Diversification Opportunities for Dime Community and Peapack Gladstone

0.39

Correlation Coefficient

Dime Community  Peapack Gladstone

Weak diversification

The 3 months correlation between Dime and Peapack is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dime Community Bancshares and Peapack Gladstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peapack Gladstone and Dime Community 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 Dime Community Bancshares are associated (or correlated) with Peapack Gladstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peapack Gladstone has no effect on the direction of Dime Community i.e., Dime Community and Peapack Gladstone go up and down completely randomly.

Pair Corralation between Dime Community and Peapack Gladstone

Given the investment horizon of 90 days Dime Community Bancshares is expected to generate 0.92 times more return on investment than Peapack Gladstone. However, Dime Community Bancshares is 1.09 times less risky than Peapack Gladstone. It trades about 0.04 of its potential returns per unit of risk. Peapack Gladstone Financial is currently generating about -0.1 per unit of risk. If you would invest  2,625  in Dime Community Bancshares on May 3, 2025 and sell it today you would earn a total of  88.00  from holding Dime Community Bancshares or generate 3.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dime Community Bancshares  vs.  Peapack Gladstone Financial

Dime Community Bancshares

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dime Community Bancshares are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dime Community is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Peapack Gladstone

Risk-Adjusted Performance

Very Weak

Over the last 90 days Peapack Gladstone Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Dime Community and Peapack Gladstone

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

The idea behind Dime Community Bancshares and Peapack Gladstone 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.