Correlation Between Avidbank Holdings and Burke Herbert
Can any of the company-specific risk be diversified away by investing in both Avidbank Holdings and Burke Herbert 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 Avidbank Holdings and Burke Herbert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avidbank Holdings and Burke Herbert Financial, you can compare the effects of market volatilities on Avidbank Holdings and Burke Herbert 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 Avidbank Holdings with a short position of Burke Herbert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avidbank Holdings and Burke Herbert.
Diversification Opportunities for Avidbank Holdings and Burke Herbert
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avidbank and Burke is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Avidbank Holdings and Burke Herbert Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burke Herbert Financial and Avidbank Holdings 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 Avidbank Holdings are associated (or correlated) with Burke Herbert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burke Herbert Financial has no effect on the direction of Avidbank Holdings i.e., Avidbank Holdings and Burke Herbert go up and down completely randomly.
Pair Corralation between Avidbank Holdings and Burke Herbert
Given the investment horizon of 90 days Avidbank Holdings is expected to generate 1.2 times less return on investment than Burke Herbert. But when comparing it to its historical volatility, Avidbank Holdings is 4.05 times less risky than Burke Herbert. It trades about 0.46 of its potential returns per unit of risk. Burke Herbert Financial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 6,051 in Burke Herbert Financial on August 29, 2024 and sell it today you would earn a total of 869.00 from holding Burke Herbert Financial or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avidbank Holdings vs. Burke Herbert Financial
Performance |
| Timeline |
| Avidbank Holdings |
| Burke Herbert Financial |
Avidbank Holdings and Burke Herbert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avidbank Holdings and Burke Herbert
The main advantage of trading using opposite Avidbank Holdings and Burke Herbert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avidbank Holdings position performs unexpectedly, Burke Herbert 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 Burke Herbert will offset losses from the drop in Burke Herbert's long position.| Avidbank Holdings vs. Invesco High Income | Avidbank Holdings vs. Blackrock Muniholdings Ny | Avidbank Holdings vs. Nuveen California Select | Avidbank Holdings vs. MFS Investment Grade |
| Burke Herbert vs. Private Bancorp of | Burke Herbert vs. Avidbank Holdings | Burke Herbert vs. American Business Bk | Burke Herbert vs. Home Federal Bancorp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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