Correlation Between CMUV Bancorp and Victory Bancorp
Can any of the company-specific risk be diversified away by investing in both CMUV Bancorp and Victory 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 CMUV Bancorp and Victory Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMUV Bancorp and The Victory Bancorp, you can compare the effects of market volatilities on CMUV Bancorp and Victory 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 CMUV Bancorp with a short position of Victory Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMUV Bancorp and Victory Bancorp.
Diversification Opportunities for CMUV Bancorp and Victory Bancorp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CMUV and Victory is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CMUV Bancorp and The Victory Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Bancorp and CMUV Bancorp 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 CMUV Bancorp are associated (or correlated) with Victory Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Bancorp has no effect on the direction of CMUV Bancorp i.e., CMUV Bancorp and Victory Bancorp go up and down completely randomly.
Pair Corralation between CMUV Bancorp and Victory Bancorp
Given the investment horizon of 90 days CMUV Bancorp is expected to generate 1.04 times more return on investment than Victory Bancorp. However, CMUV Bancorp is 1.04 times more volatile than The Victory Bancorp. It trades about 0.05 of its potential returns per unit of risk. The Victory Bancorp is currently generating about -0.03 per unit of risk. If you would invest 1,470 in CMUV Bancorp on August 28, 2024 and sell it today you would earn a total of 630.00 from holding CMUV Bancorp or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.65% |
| Values | Daily Returns |
CMUV Bancorp vs. The Victory Bancorp
Performance |
| Timeline |
| CMUV Bancorp |
| Victory Bancorp |
CMUV Bancorp and Victory Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMUV Bancorp and Victory Bancorp
The main advantage of trading using opposite CMUV Bancorp and Victory Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMUV Bancorp position performs unexpectedly, Victory 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 Victory Bancorp will offset losses from the drop in Victory Bancorp's long position.| CMUV Bancorp vs. Pioneer Bankcorp | CMUV Bancorp vs. Summit Bancshares | CMUV Bancorp vs. Liberty Northwest Bancorp | CMUV Bancorp vs. First Community |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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