Correlation Between Coastal Financial and Bank of Botetourt
Can any of the company-specific risk be diversified away by investing in both Coastal Financial and Bank of Botetourt 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 Coastal Financial and Bank of Botetourt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Financial Corp and Bank of Botetourt, you can compare the effects of market volatilities on Coastal Financial and Bank of Botetourt 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 Coastal Financial with a short position of Bank of Botetourt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Financial and Bank of Botetourt.
Diversification Opportunities for Coastal Financial and Bank of Botetourt
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Coastal and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Financial Corp and Bank of Botetourt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Botetourt and Coastal Financial 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 Coastal Financial Corp are associated (or correlated) with Bank of Botetourt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Botetourt has no effect on the direction of Coastal Financial i.e., Coastal Financial and Bank of Botetourt go up and down completely randomly.
Pair Corralation between Coastal Financial and Bank of Botetourt
Considering the 90-day investment horizon Coastal Financial Corp is expected to generate 1.95 times more return on investment than Bank of Botetourt. However, Coastal Financial is 1.95 times more volatile than Bank of Botetourt. It trades about 0.07 of its potential returns per unit of risk. Bank of Botetourt is currently generating about 0.02 per unit of risk. If you would invest 4,561 in Coastal Financial Corp on November 21, 2024 and sell it today you would earn a total of 4,669 from holding Coastal Financial Corp or generate 102.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 38.87% |
| Values | Daily Returns |
Coastal Financial Corp vs. Bank of Botetourt
Performance |
| Timeline |
| Coastal Financial Corp |
| Bank of Botetourt |
Coastal Financial and Bank of Botetourt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Financial and Bank of Botetourt
The main advantage of trading using opposite Coastal Financial and Bank of Botetourt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Financial position performs unexpectedly, Bank of Botetourt 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 Bank of Botetourt will offset losses from the drop in Bank of Botetourt's long position.| Coastal Financial vs. Affinity Bancshares | Coastal Financial vs. Home Federal Bancorp | Coastal Financial vs. First Business Financial | Coastal Financial vs. Old Point Financial |
| Bank of Botetourt vs. Elysee Development Corp | Bank of Botetourt vs. Azimut Holding SpA | Bank of Botetourt vs. Blackhawk Growth Corp | Bank of Botetourt vs. Ameritrans Capital 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |