Correlation Between Colony Bankcorp and HV Bancorp
Can any of the company-specific risk be diversified away by investing in both Colony Bankcorp and HV 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 Colony Bankcorp and HV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colony Bankcorp and HV Bancorp, you can compare the effects of market volatilities on Colony Bankcorp and HV 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 Colony Bankcorp with a short position of HV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colony Bankcorp and HV Bancorp.
Diversification Opportunities for Colony Bankcorp and HV Bancorp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Colony and HVBC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Colony Bankcorp and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and Colony Bankcorp 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 Colony Bankcorp are associated (or correlated) with HV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HV Bancorp has no effect on the direction of Colony Bankcorp i.e., Colony Bankcorp and HV Bancorp go up and down completely randomly.
Pair Corralation between Colony Bankcorp and HV Bancorp
Given the investment horizon of 90 days Colony Bankcorp is expected to generate 2.75 times less return on investment than HV Bancorp. But when comparing it to its historical volatility, Colony Bankcorp is 1.16 times less risky than HV Bancorp. It trades about 0.05 of its potential returns per unit of risk. HV Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,650 in HV Bancorp on August 25, 2024 and sell it today you would earn a total of 810.00 from holding HV Bancorp or generate 30.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.16% |
| Values | Daily Returns |
Colony Bankcorp vs. HV Bancorp
Performance |
| Timeline |
| Colony Bankcorp |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Colony Bankcorp and HV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colony Bankcorp and HV Bancorp
The main advantage of trading using opposite Colony Bankcorp and HV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colony Bankcorp position performs unexpectedly, HV 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 HV Bancorp will offset losses from the drop in HV Bancorp's long position.| Colony Bankcorp vs. Home Federal Bancorp | Colony Bankcorp vs. First Financial Northwest | Colony Bankcorp vs. First Northwest Bancorp | Colony Bankcorp vs. First Capital |
| HV Bancorp vs. Magyar Bancorp | HV Bancorp vs. Home Federal Bancorp | HV Bancorp vs. Community West Bancshares | HV Bancorp vs. Lake Shore 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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