Correlation Between Atlantic Union and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both Atlantic Union and Home Bancorp 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 Atlantic Union and Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Union Bankshares and Home Bancorp, you can compare the effects of market volatilities on Atlantic Union and Home Bancorp 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 Atlantic Union with a short position of Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Union and Home Bancorp.
Diversification Opportunities for Atlantic Union and Home Bancorp
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Atlantic and Home is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Union Bankshares and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp and Atlantic Union 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 Atlantic Union Bankshares are associated (or correlated) with Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Atlantic Union i.e., Atlantic Union and Home Bancorp go up and down completely randomly.
Pair Corralation between Atlantic Union and Home Bancorp
Considering the 90-day investment horizon Atlantic Union Bankshares is expected to generate 0.97 times more return on investment than Home Bancorp. However, Atlantic Union Bankshares is 1.04 times less risky than Home Bancorp. It trades about 0.06 of its potential returns per unit of risk. Home Bancorp is currently generating about 0.06 per unit of risk. If you would invest 2,796 in Atlantic Union Bankshares on August 31, 2024 and sell it today you would earn a total of 1,447 from holding Atlantic Union Bankshares or generate 51.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantic Union Bankshares vs. Home Bancorp
Performance |
| Timeline |
| Atlantic Union Bankshares |
| Home Bancorp |
Atlantic Union and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantic Union and Home Bancorp
The main advantage of trading using opposite Atlantic Union and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Union position performs unexpectedly, Home Bancorp 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 Home Bancorp will offset losses from the drop in Home Bancorp's long position.| Atlantic Union vs. KeyCorp | Atlantic Union vs. Comerica | Atlantic Union vs. First Horizon National | Atlantic Union vs. Western Alliance Bancorporation |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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