Correlation Between Home Bancorp and Atlantic Union
Can any of the company-specific risk be diversified away by investing in both Home Bancorp and Atlantic Union 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 Home Bancorp and Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Bancorp and Atlantic Union Bankshares, you can compare the effects of market volatilities on Home Bancorp and Atlantic Union 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 Home Bancorp with a short position of Atlantic Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Bancorp and Atlantic Union.
Diversification Opportunities for Home Bancorp and Atlantic Union
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Home and Atlantic is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Home Bancorp and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares and Home 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 Home Bancorp are associated (or correlated) with Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Home Bancorp i.e., Home Bancorp and Atlantic Union go up and down completely randomly.
Pair Corralation between Home Bancorp and Atlantic Union
Given the investment horizon of 90 days Home Bancorp is expected to generate 1.12 times more return on investment than Atlantic Union. However, Home Bancorp is 1.12 times more volatile than Atlantic Union Bankshares. It trades about 0.06 of its potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.07 per unit of risk. If you would invest 3,769 in Home Bancorp on September 2, 2024 and sell it today you would earn a total of 1,304 from holding Home Bancorp or generate 34.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Bancorp vs. Atlantic Union Bankshares
Performance |
| Timeline |
| Home Bancorp |
| Atlantic Union Bankshares |
Home Bancorp and Atlantic Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Bancorp and Atlantic Union
The main advantage of trading using opposite Home Bancorp and Atlantic Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Bancorp position performs unexpectedly, Atlantic Union 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 Atlantic Union will offset losses from the drop in Atlantic Union's long position.| Home Bancorp vs. Affinity Bancshares | Home Bancorp vs. Auburn National Bancorporation | Home Bancorp vs. First Community | Home Bancorp vs. LINKBANCORP |
| Atlantic Union vs. Home Bancorp | Atlantic Union vs. Community West Bancshares | Atlantic Union vs. First Community | Atlantic Union vs. Great Southern 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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