Correlation Between Bank of Marin and Jeffersonville Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank of Marin and Jeffersonville 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 Bank of Marin and Jeffersonville Bancorp 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 Jeffersonville Bancorp, you can compare the effects of market volatilities on Bank of Marin and Jeffersonville 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 Bank of Marin with a short position of Jeffersonville Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Marin and Jeffersonville Bancorp.
Diversification Opportunities for Bank of Marin and Jeffersonville Bancorp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Jeffersonville is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Marin and Jeffersonville Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffersonville 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 Jeffersonville Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffersonville Bancorp has no effect on the direction of Bank of Marin i.e., Bank of Marin and Jeffersonville Bancorp go up and down completely randomly.
Pair Corralation between Bank of Marin and Jeffersonville Bancorp
Given the investment horizon of 90 days Bank of Marin is expected to generate 1.11 times more return on investment than Jeffersonville Bancorp. However, Bank of Marin is 1.11 times more volatile than Jeffersonville Bancorp. It trades about 0.0 of its potential returns per unit of risk. Jeffersonville Bancorp is currently generating about -0.02 per unit of risk. If you would invest 3,044 in Bank of Marin on August 30, 2024 and sell it today you would lose (485.00) from holding Bank of Marin or give up 15.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Bank of Marin vs. Jeffersonville Bancorp
Performance |
| Timeline |
| Bank of Marin |
| Jeffersonville Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of Marin and Jeffersonville Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Marin and Jeffersonville Bancorp
The main advantage of trading using opposite Bank of Marin and Jeffersonville Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Marin position performs unexpectedly, Jeffersonville 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 Jeffersonville Bancorp will offset losses from the drop in Jeffersonville Bancorp'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 |
| Jeffersonville Bancorp vs. Heritage NOLA Bancorp | Jeffersonville Bancorp vs. Rhinebeck Bancorp | Jeffersonville Bancorp vs. Bridgewater Bancshares Depositary | Jeffersonville Bancorp vs. Bank of Marin |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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