Correlation Between Ames National and Valley National
Can any of the company-specific risk be diversified away by investing in both Ames 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 Ames 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 Ames National and Valley National Bancorp, you can compare the effects of market volatilities on Ames 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 Ames National with a short position of Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ames National and Valley National.
Diversification Opportunities for Ames National and Valley National
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ames and Valley is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ames National 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 Ames 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 Ames National 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 Ames National i.e., Ames National and Valley National go up and down completely randomly.
Pair Corralation between Ames National and Valley National
Given the investment horizon of 90 days Ames National is expected to generate 0.59 times more return on investment than Valley National. However, Ames National is 1.7 times less risky than Valley National. It trades about 0.15 of its potential returns per unit of risk. Valley National Bancorp is currently generating about -0.23 per unit of risk. If you would invest 1,780 in Ames National on November 28, 2024 and sell it today you would earn a total of 52.00 from holding Ames National or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ames National vs. Valley National Bancorp
Performance |
| Timeline |
| Ames National |
| Valley National Bancorp |
Ames National and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ames National and Valley National
The main advantage of trading using opposite Ames National and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ames 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.| Ames National vs. First Community | Ames National vs. Old Point Financial | Ames National vs. Oak Valley Bancorp | Ames National vs. Chemung Financial Corp |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| CEOs Directory Screen CEOs from public companies around the world |