Correlation Between Peapack Gladstone and First Commonwealth

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

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

Diversification Opportunities for Peapack Gladstone and First Commonwealth

0.88

Correlation Coefficient

Peapack Gladstone  First Commonwealth

Very poor diversification

The 3 months correlation between Peapack and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Peapack Gladstone Financial and First Commonwealth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Commonwealth and Peapack Gladstone 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 Peapack Gladstone Financial are associated (or correlated) with First Commonwealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Commonwealth has no effect on the direction of Peapack Gladstone i.e., Peapack Gladstone and First Commonwealth go up and down completely randomly.

Pair Corralation between Peapack Gladstone and First Commonwealth

Considering the 90-day investment horizon Peapack Gladstone Financial is expected to generate 1.36 times more return on investment than First Commonwealth. However, Peapack Gladstone is 1.36 times more volatile than First Commonwealth Financial. It trades about 0.02 of its potential returns per unit of risk. First Commonwealth Financial is currently generating about -0.01 per unit of risk. If you would invest  2,528  in Peapack Gladstone Financial on August 11, 2025 and sell it today you would earn a total of  41.00  from holding Peapack Gladstone Financial or generate 1.62% return on investment over 90 days.

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

Peapack Gladstone Financial  vs.  First Commonwealth Financial

Peapack Gladstone

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peapack Gladstone Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Peapack Gladstone is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

First Commonwealth

Risk-Adjusted Performance

Weakest

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

Pair Trading with Peapack Gladstone and First Commonwealth

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

The idea behind Peapack Gladstone Financial and First Commonwealth 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.