Correlation Between Penns Woods and Osprey Solana

Can any of the company-specific risk be diversified away by investing in both Penns Woods and Osprey Solana 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 Penns Woods and Osprey Solana into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Penns Woods and Osprey Solana

0.68

Correlation Coefficient

Penns Woods  Osprey Solana

Poor diversification

The 3 months correlation between Penns and Osprey is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Penns Woods Bancorp and Osprey Solana Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osprey Solana Trust and Penns Woods 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 Penns Woods Bancorp are associated (or correlated) with Osprey Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osprey Solana Trust has no effect on the direction of Penns Woods i.e., Penns Woods and Osprey Solana go up and down completely randomly.

Pair Corralation between Penns Woods and Osprey Solana

Given the investment horizon of 90 days Penns Woods is expected to generate 3.59 times less return on investment than Osprey Solana. But when comparing it to its historical volatility, Penns Woods Bancorp is 3.19 times less risky than Osprey Solana. It trades about 0.12 of its potential returns per unit of risk. Osprey Solana Trust is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  989.00  in Osprey Solana Trust on September 22, 2024 and sell it today you would earn a total of  186.00  from holding Osprey Solana Trust or generate 18.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Penns Woods Bancorp  vs.  Osprey Solana Trust

Penns Woods Bancorp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Penns Woods Bancorp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Penns Woods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Osprey Solana Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Osprey Solana Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Osprey Solana disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Penns Woods and Osprey Solana

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

The idea behind Penns Woods Bancorp and Osprey Solana Trust 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..