Correlation Between Credicorp and HV Bancorp
Can any of the company-specific risk be diversified away by investing in both Credicorp and HV 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 Credicorp and HV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credicorp and HV Bancorp, you can compare the effects of market volatilities on Credicorp and HV 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 Credicorp with a short position of HV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credicorp and HV Bancorp.
Diversification Opportunities for Credicorp and HV Bancorp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Credicorp and HVBC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Credicorp and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and Credicorp 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 Credicorp are associated (or correlated) with HV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HV Bancorp has no effect on the direction of Credicorp i.e., Credicorp and HV Bancorp go up and down completely randomly.
Pair Corralation between Credicorp and HV Bancorp
Considering the 90-day investment horizon Credicorp is expected to generate 2.82 times less return on investment than HV Bancorp. But when comparing it to its historical volatility, Credicorp is 1.28 times less risky than HV Bancorp. It trades about 0.05 of its potential returns per unit of risk. HV Bancorp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,780 in HV Bancorp on August 28, 2024 and sell it today you would earn a total of 680.00 from holding HV Bancorp or generate 24.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 23.74% |
| Values | Daily Returns |
Credicorp vs. HV Bancorp
Performance |
| Timeline |
| Credicorp |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Credicorp and HV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credicorp and HV Bancorp
The main advantage of trading using opposite Credicorp and HV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credicorp position performs unexpectedly, HV 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 HV Bancorp will offset losses from the drop in HV Bancorp's long position.| Credicorp vs. Banco Santander Brasil | Credicorp vs. CrossFirst Bankshares | Credicorp vs. Banco Bradesco SA | Credicorp vs. CF Bankshares |
| HV Bancorp vs. Magyar Bancorp | HV Bancorp vs. Home Federal Bancorp | HV Bancorp vs. Community West Bancshares | HV Bancorp vs. Lake Shore 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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