Correlation Between German American and HV Bancorp
Can any of the company-specific risk be diversified away by investing in both German American 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 German American and HV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between German American Bancorp and HV Bancorp, you can compare the effects of market volatilities on German American 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 German American with a short position of HV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of German American and HV Bancorp.
Diversification Opportunities for German American and HV Bancorp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between German and HVBC is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding German American Bancorp and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and German American 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 German American Bancorp 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 German American i.e., German American and HV Bancorp go up and down completely randomly.
Pair Corralation between German American and HV Bancorp
Given the investment horizon of 90 days German American is expected to generate 2.11 times less return on investment than HV Bancorp. In addition to that, German American is 1.18 times more volatile than HV Bancorp. It trades about 0.08 of its total potential returns per unit of risk. HV Bancorp is currently generating about 0.2 per unit of volatility. If you would invest 3,400 in HV Bancorp on September 2, 2024 and sell it today you would earn a total of 60.00 from holding HV Bancorp or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.61% |
| Values | Daily Returns |
German American Bancorp vs. HV Bancorp
Performance |
| Timeline |
| German American Bancorp |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
German American and HV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with German American and HV Bancorp
The main advantage of trading using opposite German American and HV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if German American 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.| German American vs. Lakeland Financial | German American vs. Great Southern Bancorp | German American vs. First Merchants | German American vs. First Financial |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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