Correlation Between Bank of Botetourt and Northeast Indiana
Can any of the company-specific risk be diversified away by investing in both Bank of Botetourt and Northeast Indiana 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 Northeast Indiana 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 Northeast Indiana Bancorp, you can compare the effects of market volatilities on Bank of Botetourt and Northeast Indiana 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 Northeast Indiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Botetourt and Northeast Indiana.
Diversification Opportunities for Bank of Botetourt and Northeast Indiana
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Northeast is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Botetourt and Northeast Indiana Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northeast Indiana Bancorp 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 Northeast Indiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northeast Indiana Bancorp has no effect on the direction of Bank of Botetourt i.e., Bank of Botetourt and Northeast Indiana go up and down completely randomly.
Pair Corralation between Bank of Botetourt and Northeast Indiana
If you would invest 3,193 in Bank of Botetourt on November 28, 2024 and sell it today you would earn a total of 207.00 from holding Bank of Botetourt or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of Botetourt vs. Northeast Indiana Bancorp
Performance |
| Timeline |
| Bank of Botetourt |
| Northeast Indiana Bancorp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of Botetourt and Northeast Indiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Botetourt and Northeast Indiana
The main advantage of trading using opposite Bank of Botetourt and Northeast Indiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Botetourt position performs unexpectedly, Northeast Indiana 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 Northeast Indiana will offset losses from the drop in Northeast Indiana'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 |
| Northeast Indiana vs. PSB Holdings | Northeast Indiana vs. Chesapeake Finl Shs | Northeast Indiana vs. Eagle Financial Services | Northeast Indiana vs. CCFNB 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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