Correlation Between Heritage Financial and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both Heritage Financial and Rhinebeck 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 Heritage Financial and Rhinebeck Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Financial and Rhinebeck Bancorp, you can compare the effects of market volatilities on Heritage Financial and Rhinebeck 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 Heritage Financial with a short position of Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Financial and Rhinebeck Bancorp.
Diversification Opportunities for Heritage Financial and Rhinebeck Bancorp
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heritage and Rhinebeck is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Financial and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp and Heritage Financial 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 Heritage Financial are associated (or correlated) with Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Heritage Financial i.e., Heritage Financial and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between Heritage Financial and Rhinebeck Bancorp
Given the investment horizon of 90 days Heritage Financial is expected to generate 3.87 times more return on investment than Rhinebeck Bancorp. However, Heritage Financial is 3.87 times more volatile than Rhinebeck Bancorp. It trades about 0.24 of its potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.5 per unit of risk. If you would invest 2,213 in Heritage Financial on August 26, 2024 and sell it today you would earn a total of 437.00 from holding Heritage Financial or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Financial vs. Rhinebeck Bancorp
Performance |
| Timeline |
| Heritage Financial |
| Rhinebeck Bancorp |
Heritage Financial and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Financial and Rhinebeck Bancorp
The main advantage of trading using opposite Heritage Financial and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Financial position performs unexpectedly, Rhinebeck 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 Rhinebeck Bancorp will offset losses from the drop in Rhinebeck Bancorp's long position.| Heritage Financial vs. Heritage Commerce Corp | Heritage Financial vs. Horizon Bancorp | Heritage Financial vs. Heartland Financial USA | Heritage Financial vs. Independent Bank |
| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |