Correlation Between TC Bancshares and LINKBANCORP

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

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

Diversification Opportunities for TC Bancshares and LINKBANCORP

-0.23

Correlation Coefficient

TC Bancshares  LINKBANCORP

Very good diversification

The 3 months correlation between TCBC and LINKBANCORP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding TC Bancshares and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP and TC Bancshares 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 TC Bancshares are associated (or correlated) with LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of TC Bancshares i.e., TC Bancshares and LINKBANCORP go up and down completely randomly.

Pair Corralation between TC Bancshares and LINKBANCORP

If you would invest  634.00  in LINKBANCORP on September 16, 2024 and sell it today you would earn a total of  138.00  from holding LINKBANCORP or generate 21.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

TC Bancshares  vs.  LINKBANCORP

TC Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TC Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, TC Bancshares is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

LINKBANCORP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LINKBANCORP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting forward-looking signals, LINKBANCORP sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TC Bancshares and LINKBANCORP

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

The idea behind TC Bancshares and LINKBANCORP 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.