Correlation Between FNB Corp and Valley National
Can any of the company-specific risk be diversified away by investing in both FNB Corp and Valley National 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 FNB Corp and Valley National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FNB Corp and Valley National Bancorp, you can compare the effects of market volatilities on FNB Corp and Valley National 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 FNB Corp with a short position of Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNB Corp and Valley National.
Diversification Opportunities for FNB Corp and Valley National
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FNB and Valley is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding FNB Corp and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National Bancorp and FNB Corp 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 FNB Corp are associated (or correlated) with Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of FNB Corp i.e., FNB Corp and Valley National go up and down completely randomly.
Pair Corralation between FNB Corp and Valley National
Considering the 90-day investment horizon FNB Corp is expected to generate 1.29 times more return on investment than Valley National. However, FNB Corp is 1.29 times more volatile than Valley National Bancorp. It trades about 0.24 of its potential returns per unit of risk. Valley National Bancorp is currently generating about 0.22 per unit of risk. If you would invest 1,458 in FNB Corp on August 28, 2024 and sell it today you would earn a total of 271.00 from holding FNB Corp or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FNB Corp vs. Valley National Bancorp
Performance |
| Timeline |
| FNB Corp |
| Valley National Bancorp |
FNB Corp and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FNB Corp and Valley National
The main advantage of trading using opposite FNB Corp and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB Corp position performs unexpectedly, Valley National 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 Valley National will offset losses from the drop in Valley National's long position.| FNB Corp vs. ST Bancorp | FNB Corp vs. CrossFirst Bankshares | FNB Corp vs. Enterprise Financial Services | FNB Corp vs. The First Bancshares, |
| Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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