Correlation Between Bank of Hawaii and National Bank
Can any of the company-specific risk be diversified away by investing in both Bank of Hawaii and National Bank 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 Hawaii and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Hawaii and National Bank Holdings, you can compare the effects of market volatilities on Bank of Hawaii and National Bank 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 Hawaii with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Hawaii and National Bank.
Diversification Opportunities for Bank of Hawaii and National Bank
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and National is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Hawaii and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings and Bank of Hawaii 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 Hawaii are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of Bank of Hawaii i.e., Bank of Hawaii and National Bank go up and down completely randomly.
Pair Corralation between Bank of Hawaii and National Bank
Assuming the 90 days trading horizon Bank of Hawaii is expected to under-perform the National Bank. But the preferred stock apears to be less risky and, when comparing its historical volatility, Bank of Hawaii is 2.82 times less risky than National Bank. The preferred stock trades about -0.09 of its potential returns per unit of risk. The National Bank Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,440 in National Bank Holdings on August 26, 2024 and sell it today you would earn a total of 447.00 from holding National Bank Holdings or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Hawaii vs. National Bank Holdings
Performance |
| Timeline |
| Bank of Hawaii |
| National Bank Holdings |
Bank of Hawaii and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Hawaii and National Bank
The main advantage of trading using opposite Bank of Hawaii and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Hawaii position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Bank of Hawaii vs. CullenFrost Bankers | Bank of Hawaii vs. Citizens Financial Group | Bank of Hawaii vs. Cadence Bank | Bank of Hawaii vs. Truist Financial |
| National Bank vs. First Community | National Bank vs. Community West Bancshares | National Bank vs. First Financial Northwest | National Bank vs. First Northwest 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |