Correlation Between Mid Penn and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both Mid Penn 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 Mid Penn and LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Penn Bancorp and LINKBANCORP, you can compare the effects of market volatilities on Mid Penn 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 Mid Penn with a short position of LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Penn and LINKBANCORP.
Diversification Opportunities for Mid Penn and LINKBANCORP
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid and LINKBANCORP is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mid Penn Bancorp and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and Mid Penn 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 Mid Penn Bancorp 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 Mid Penn i.e., Mid Penn and LINKBANCORP go up and down completely randomly.
Pair Corralation between Mid Penn and LINKBANCORP
Considering the 90-day investment horizon Mid Penn is expected to generate 4.39 times less return on investment than LINKBANCORP. But when comparing it to its historical volatility, Mid Penn Bancorp is 1.42 times less risky than LINKBANCORP. It trades about 0.04 of its potential returns per unit of risk. LINKBANCORP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 655.00 in LINKBANCORP on April 24, 2025 and sell it today you would earn a total of 85.00 from holding LINKBANCORP or generate 12.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mid Penn Bancorp vs. LINKBANCORP
Performance |
Timeline |
Mid Penn Bancorp |
LINKBANCORP |
Mid Penn and LINKBANCORP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mid Penn and LINKBANCORP
The main advantage of trading using opposite Mid Penn and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Penn 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.Mid Penn vs. LINKBANCORP | Mid Penn vs. Orrstown Financial Services | Mid Penn vs. Community West Bancshares | Mid Penn vs. MidWestOne Financial Group |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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