Correlation Between LINKBANCORP and Commercial National

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

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

Diversification Opportunities for LINKBANCORP and Commercial National

0.63

Correlation Coefficient

LINKBANCORP  Commercial National

Poor diversification

The 3 months correlation between LINKBANCORP and Commercial is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding LINKBANCORP and Commercial National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial National and LINKBANCORP 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 LINKBANCORP are associated (or correlated) with Commercial National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial National has no effect on the direction of LINKBANCORP i.e., LINKBANCORP and Commercial National go up and down completely randomly.

Pair Corralation between LINKBANCORP and Commercial National

Given the investment horizon of 90 days LINKBANCORP is expected to generate 1.61 times more return on investment than Commercial National. However, LINKBANCORP is 1.61 times more volatile than Commercial National Financial. It trades about 0.13 of its potential returns per unit of risk. Commercial National Financial is currently generating about 0.12 per unit of risk. If you would invest  648.00  in LINKBANCORP on April 25, 2025 and sell it today you would earn a total of  107.00  from holding LINKBANCORP or generate 16.51% return on investment over 90 days.

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

LINKBANCORP  vs.  Commercial National Financial

LINKBANCORP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent forward-looking signals, LINKBANCORP sustained solid returns over the last few months and may actually be approaching a breakup point.

Commercial National

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Commercial National Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Commercial National may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with LINKBANCORP and Commercial National

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

The idea behind LINKBANCORP and Commercial National 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.