Correlation Between Old Point and First Savings

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

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

Diversification Opportunities for Old Point and First Savings

-0.11

Correlation Coefficient

Old Point  First Savings

Good diversification

The 3 months correlation between Old and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and First Savings Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Savings Financial and Old Point 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 Old Point Financial are associated (or correlated) with First Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Savings Financial has no effect on the direction of Old Point i.e., Old Point and First Savings go up and down completely randomly.

Pair Corralation between Old Point and First Savings

Given the investment horizon of 90 days Old Point Financial is expected to generate 0.81 times more return on investment than First Savings. However, Old Point Financial is 1.24 times less risky than First Savings. It trades about 0.04 of its potential returns per unit of risk. First Savings Financial is currently generating about -0.08 per unit of risk. If you would invest  3,928  in Old Point Financial on May 3, 2025 and sell it today you would earn a total of  87.00  from holding Old Point Financial or generate 2.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Old Point Financial  vs.  First Savings Financial

Old Point Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Old Point Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Old Point is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

First Savings Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Savings Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Old Point and First Savings

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

The idea behind Old Point Financial and First Savings 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.