Correlation Between Oak Valley and Peoples Bancorp

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

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

Diversification Opportunities for Oak Valley and Peoples Bancorp

0.64

Correlation Coefficient

Oak Valley  Peoples Bancorp

Poor diversification

The 3 months correlation between Oak and Peoples is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Peoples Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp and Oak Valley 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 Oak Valley Bancorp are associated (or correlated) with Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Oak Valley i.e., Oak Valley and Peoples Bancorp go up and down completely randomly.

Pair Corralation between Oak Valley and Peoples Bancorp

Given the investment horizon of 90 days Oak Valley Bancorp is expected to generate 0.94 times more return on investment than Peoples Bancorp. However, Oak Valley Bancorp is 1.06 times less risky than Peoples Bancorp. It trades about 0.06 of its potential returns per unit of risk. Peoples Bancorp of is currently generating about 0.01 per unit of risk. If you would invest  2,495  in Oak Valley Bancorp on May 7, 2025 and sell it today you would earn a total of  160.00  from holding Oak Valley Bancorp or generate 6.41% return on investment over 90 days.

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

Oak Valley Bancorp  vs.  Peoples Bancorp of

Oak Valley Bancorp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Oak Valley Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Oak Valley may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Peoples Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days Peoples Bancorp of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Peoples Bancorp is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Oak Valley and Peoples Bancorp

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

The idea behind Oak Valley Bancorp and Peoples Bancorp of 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.