Correlation Between Waterstone Financial and Old Point

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

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

Diversification Opportunities for Waterstone Financial and Old Point

0.67

Correlation Coefficient

Waterstone Financial  Old Point

Poor diversification

The 3 months correlation between Waterstone and Old is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Waterstone Financial and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial and Waterstone Financial 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 Waterstone Financial are associated (or correlated) with Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Waterstone Financial i.e., Waterstone Financial and Old Point go up and down completely randomly.

Pair Corralation between Waterstone Financial and Old Point

Given the investment horizon of 90 days Waterstone Financial is expected to generate 1.25 times more return on investment than Old Point. However, Waterstone Financial is 1.25 times more volatile than Old Point Financial. It trades about 0.1 of its potential returns per unit of risk. Old Point Financial is currently generating about 0.03 per unit of risk. If you would invest  1,223  in Waterstone Financial on May 6, 2025 and sell it today you would earn a total of  98.00  from holding Waterstone Financial or generate 8.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Waterstone Financial  vs.  Old Point Financial

Waterstone Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Waterstone Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental drivers, Waterstone Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Old Point Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Old Point Financial are ranked lower than 2 (%) 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.

Pair Trading with Waterstone Financial and Old Point

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

The idea behind Waterstone Financial and Old Point 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..