Correlation Between Heartland Financial and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and Postal Savings 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 Heartland Financial and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Postal Savings Bank, you can compare the effects of market volatilities on Heartland Financial and Postal Savings 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 Heartland Financial with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Postal Savings.
Diversification Opportunities for Heartland Financial and Postal Savings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Heartland and Postal is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and Heartland 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 Heartland Financial USA are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Heartland Financial i.e., Heartland Financial and Postal Savings go up and down completely randomly.
Pair Corralation between Heartland Financial and Postal Savings
Assuming the 90 days horizon Heartland Financial is expected to generate 2.08 times less return on investment than Postal Savings. But when comparing it to its historical volatility, Heartland Financial USA is 4.09 times less risky than Postal Savings. It trades about 0.18 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Postal Savings Bank on September 5, 2024 and sell it today you would earn a total of 28.00 from holding Postal Savings Bank or generate 112.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Postal Savings Bank
Performance |
| Timeline |
| Heartland Financial USA |
| Postal Savings Bank |
Heartland Financial and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Postal Savings
The main advantage of trading using opposite Heartland Financial and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Heartland Financial vs. Postal Savings Bank | Heartland Financial vs. CAIXABANK UNADR 13 | Heartland Financial vs. Superior Plus Corp | Heartland Financial vs. NMI Holdings |
| Postal Savings vs. Magnachip Semiconductor | Postal Savings vs. TOREX SEMICONDUCTOR LTD | Postal Savings vs. NorAm Drilling AS | Postal Savings vs. LION ONE METALS |
Check out your portfolio center.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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