Correlation Between Bank of Botetourt and Logansport Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Botetourt and Logansport Financial 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 Botetourt and Logansport Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Botetourt and Logansport Financial Corp, you can compare the effects of market volatilities on Bank of Botetourt and Logansport Financial 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 Botetourt with a short position of Logansport Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Botetourt and Logansport Financial.
Diversification Opportunities for Bank of Botetourt and Logansport Financial
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Logansport is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Botetourt and Logansport Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logansport Financial Corp and Bank of Botetourt 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 Botetourt are associated (or correlated) with Logansport Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logansport Financial Corp has no effect on the direction of Bank of Botetourt i.e., Bank of Botetourt and Logansport Financial go up and down completely randomly.
Pair Corralation between Bank of Botetourt and Logansport Financial
If you would invest 3,204 in Bank of Botetourt on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Bank of Botetourt or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bank of Botetourt vs. Logansport Financial Corp
Performance |
| Timeline |
| Bank of Botetourt |
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of Botetourt and Logansport Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Botetourt and Logansport Financial
The main advantage of trading using opposite Bank of Botetourt and Logansport Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Botetourt position performs unexpectedly, Logansport Financial 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 Logansport Financial will offset losses from the drop in Logansport Financial's long position.| Bank of Botetourt vs. Century Financial Corp | Bank of Botetourt vs. FS Bancorp | Bank of Botetourt vs. Lyons Bancorp | Bank of Botetourt vs. Solvay Bank Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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