Correlation Between Mid Penn and Ohio Valley

Can any of the company-specific risk be diversified away by investing in both Mid Penn and Ohio Valley 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 Ohio Valley 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 Ohio Valley Banc, you can compare the effects of market volatilities on Mid Penn and Ohio Valley 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 Ohio Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Penn and Ohio Valley.

Diversification Opportunities for Mid Penn and Ohio Valley

0.54

Correlation Coefficient

Mid Penn  Ohio Valley

Very weak diversification

The 3 months correlation between Mid and Ohio is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mid Penn Bancorp and Ohio Valley Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Valley Banc 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 Ohio Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Valley Banc has no effect on the direction of Mid Penn i.e., Mid Penn and Ohio Valley go up and down completely randomly.

Pair Corralation between Mid Penn and Ohio Valley

Considering the 90-day investment horizon Mid Penn Bancorp is expected to generate 0.72 times more return on investment than Ohio Valley. However, Mid Penn Bancorp is 1.39 times less risky than Ohio Valley. It trades about -0.05 of its potential returns per unit of risk. Ohio Valley Banc is currently generating about -0.1 per unit of risk. If you would invest  2,881  in Mid Penn Bancorp on May 4, 2025 and sell it today you would lose (170.00) from holding Mid Penn Bancorp or give up 5.9% of portfolio value over 90 days.

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

Mid Penn Bancorp  vs.  Ohio Valley Banc

Mid Penn Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Penn Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Mid Penn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ohio Valley Banc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ohio Valley Banc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Mid Penn and Ohio Valley

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

The idea behind Mid Penn Bancorp and Ohio Valley Banc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.