Correlation Between Heartland Banccorp and CIB Marine
Can any of the company-specific risk be diversified away by investing in both Heartland Banccorp and CIB Marine 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 Heartland Banccorp and CIB Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Banccorp and CIB Marine Bancshares, you can compare the effects of market volatilities on Heartland Banccorp and CIB Marine 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 Heartland Banccorp with a short position of CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Banccorp and CIB Marine.
Diversification Opportunities for Heartland Banccorp and CIB Marine
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heartland and CIB is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Banccorp and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares and Heartland Banccorp 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 Heartland Banccorp are associated (or correlated) with CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of Heartland Banccorp i.e., Heartland Banccorp and CIB Marine go up and down completely randomly.
Pair Corralation between Heartland Banccorp and CIB Marine
Given the investment horizon of 90 days Heartland Banccorp is expected to generate 1.99 times more return on investment than CIB Marine. However, Heartland Banccorp is 1.99 times more volatile than CIB Marine Bancshares. It trades about 0.05 of its potential returns per unit of risk. CIB Marine Bancshares is currently generating about -0.01 per unit of risk. If you would invest 9,375 in Heartland Banccorp on August 28, 2024 and sell it today you would earn a total of 7,425 from holding Heartland Banccorp or generate 79.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.89% |
| Values | Daily Returns |
Heartland Banccorp vs. CIB Marine Bancshares
Performance |
| Timeline |
| Heartland Banccorp |
| CIB Marine Bancshares |
Heartland Banccorp and CIB Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Banccorp and CIB Marine
The main advantage of trading using opposite Heartland Banccorp and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Banccorp position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine's long position.| Heartland Banccorp vs. U I Financial | Heartland Banccorp vs. CIB Marine Bancshares | Heartland Banccorp vs. Bank of San | Heartland Banccorp vs. Citizens Bancorp of |
| CIB Marine vs. U I Financial | CIB Marine vs. Heartland Banccorp | CIB Marine vs. United Bancorporation of | CIB Marine vs. Harbor Bankshares |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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