Correlation Between American National and Valley National
Can any of the company-specific risk be diversified away by investing in both American National and Valley National 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 American National and Valley National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Bankshares and Valley National Bancorp, you can compare the effects of market volatilities on American National and Valley National 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 American National with a short position of Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and Valley National.
Diversification Opportunities for American National and Valley National
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Valley is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding American National Bankshares and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National Bancorp and American National 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 American National Bankshares are associated (or correlated) with Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of American National i.e., American National and Valley National go up and down completely randomly.
Pair Corralation between American National and Valley National
Given the investment horizon of 90 days American National Bankshares is expected to generate 0.78 times more return on investment than Valley National. However, American National Bankshares is 1.28 times less risky than Valley National. It trades about 0.08 of its potential returns per unit of risk. Valley National Bancorp is currently generating about 0.05 per unit of risk. If you would invest 3,032 in American National Bankshares on September 2, 2024 and sell it today you would earn a total of 128.00 from holding American National Bankshares or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 8.06% |
| Values | Daily Returns |
American National Bankshares vs. Valley National Bancorp
Performance |
| Timeline |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Valley National Bancorp |
American National and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and Valley National
The main advantage of trading using opposite American National and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National position performs unexpectedly, Valley National 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 Valley National will offset losses from the drop in Valley National's long position.| American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest | American National vs. Great Southern Bancorp |
| Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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