Correlation Between Evans Bancorp and John Marshall
Can any of the company-specific risk be diversified away by investing in both Evans Bancorp and John Marshall 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 Evans Bancorp and John Marshall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evans Bancorp and John Marshall Bancorp, you can compare the effects of market volatilities on Evans Bancorp and John Marshall 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 Evans Bancorp with a short position of John Marshall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evans Bancorp and John Marshall.
Diversification Opportunities for Evans Bancorp and John Marshall
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Evans and John is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Evans Bancorp and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall Bancorp and Evans 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 Evans Bancorp are associated (or correlated) with John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of Evans Bancorp i.e., Evans Bancorp and John Marshall go up and down completely randomly.
Pair Corralation between Evans Bancorp and John Marshall
Given the investment horizon of 90 days Evans Bancorp is expected to generate 0.73 times more return on investment than John Marshall. However, Evans Bancorp is 1.38 times less risky than John Marshall. It trades about 0.22 of its potential returns per unit of risk. John Marshall Bancorp is currently generating about 0.1 per unit of risk. If you would invest 2,601 in Evans Bancorp on August 29, 2024 and sell it today you would earn a total of 1,857 from holding Evans Bancorp or generate 71.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evans Bancorp vs. John Marshall Bancorp
Performance |
| Timeline |
| Evans Bancorp |
| John Marshall Bancorp |
Evans Bancorp and John Marshall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evans Bancorp and John Marshall
The main advantage of trading using opposite Evans Bancorp and John Marshall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evans Bancorp position performs unexpectedly, John Marshall 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 John Marshall will offset losses from the drop in John Marshall's long position.| Evans Bancorp vs. First Community | Evans Bancorp vs. Oak Valley Bancorp | Evans Bancorp vs. First Financial Northwest | Evans Bancorp vs. ESSA Bancorp |
| John Marshall vs. Home Federal Bancorp | John Marshall vs. Magyar Bancorp | John Marshall vs. ChoiceOne Financial Services | John Marshall vs. Affinity Bancshares |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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