Correlation Between Bank of Marin and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both Bank of Marin and Heritage NOLA 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 Bank of Marin and Heritage NOLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Marin and Heritage NOLA Bancorp, you can compare the effects of market volatilities on Bank of Marin and Heritage NOLA 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 Bank of Marin with a short position of Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Marin and Heritage NOLA.
Diversification Opportunities for Bank of Marin and Heritage NOLA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Heritage is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Marin and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp and Bank of Marin 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 Bank of Marin are associated (or correlated) with Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of Bank of Marin i.e., Bank of Marin and Heritage NOLA go up and down completely randomly.
Pair Corralation between Bank of Marin and Heritage NOLA
Given the investment horizon of 90 days Bank of Marin is expected to generate 1.76 times more return on investment than Heritage NOLA. However, Bank of Marin is 1.76 times more volatile than Heritage NOLA Bancorp. It trades about -0.02 of its potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about -0.04 per unit of risk. If you would invest 2,510 in Bank of Marin on November 28, 2024 and sell it today you would lose (31.00) from holding Bank of Marin or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Marin vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| Bank of Marin |
| Heritage NOLA Bancorp |
Bank of Marin and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Marin and Heritage NOLA
The main advantage of trading using opposite Bank of Marin and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Marin position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA's long position.| Bank of Marin vs. Community West Bancshares | Bank of Marin vs. Heritage Financial | Bank of Marin vs. First Financial Northwest | Bank of Marin vs. Sierra Bancorp |
| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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