Correlation Between LINKBANCORP and CVB Financial

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

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

Diversification Opportunities for LINKBANCORP and CVB Financial

0.87

Correlation Coefficient

LINKBANCORP  CVB Financial

Very poor diversification

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

Pair Corralation between LINKBANCORP and CVB Financial

Given the investment horizon of 90 days LINKBANCORP is expected to generate 1.19 times more return on investment than CVB Financial. However, LINKBANCORP is 1.19 times more volatile than CVB Financial. It trades about 0.01 of its potential returns per unit of risk. CVB Financial is currently generating about 0.0 per unit of risk. If you would invest  712.00  in LINKBANCORP on May 18, 2025 and sell it today you would lose (1.00) from holding LINKBANCORP or give up 0.14% of portfolio value over 90 days.

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

LINKBANCORP  vs.  CVB Financial

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.

CVB Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days CVB Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, CVB Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LINKBANCORP and CVB Financial

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

The idea behind LINKBANCORP and CVB 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.