Correlation Between Independent Bank and LINKBANCORP

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

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

Diversification Opportunities for Independent Bank and LINKBANCORP

0.46

Correlation Coefficient

Independent Bank  LINKBANCORP

Very weak diversification

The 3 months correlation between Independent and LINKBANCORP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Independent Bank and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Independent Bank 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 Independent Bank 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 Independent Bank i.e., Independent Bank and LINKBANCORP go up and down completely randomly.

Pair Corralation between Independent Bank and LINKBANCORP

Given the investment horizon of 90 days Independent Bank is expected to generate 1.06 times more return on investment than LINKBANCORP. However, Independent Bank is 1.06 times more volatile than LINKBANCORP. It trades about 0.06 of its potential returns per unit of risk. LINKBANCORP is currently generating about -0.04 per unit of risk. If you would invest  6,560  in Independent Bank on July 2, 2025 and sell it today you would earn a total of  384.00  from holding Independent Bank or generate 5.85% return on investment over 90 days.

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

Independent Bank  vs.  LINKBANCORP

Independent Bank

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Independent Bank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental indicators, Independent Bank may actually be approaching a critical reversion point that can send shares even higher in October 2025.

LINKBANCORP

Risk-Adjusted Performance

Weakest

Over the last 90 days LINKBANCORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, LINKBANCORP is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Independent Bank and LINKBANCORP

The main advantage of trading using opposite Independent Bank and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independent Bank 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 Independent Bank 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..