Correlation Between HP and FNCB Bancorp
Can any of the company-specific risk be diversified away by investing in both HP and FNCB 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 HP and FNCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HP Inc and FNCB Bancorp, you can compare the effects of market volatilities on HP and FNCB 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 HP with a short position of FNCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and FNCB Bancorp.
Diversification Opportunities for HP and FNCB Bancorp
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HP and FNCB is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and FNCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNCB Bancorp and HP 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 HP Inc are associated (or correlated) with FNCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNCB Bancorp has no effect on the direction of HP i.e., HP and FNCB Bancorp go up and down completely randomly.
Pair Corralation between HP and FNCB Bancorp
If you would invest 3,647 in HP Inc on August 25, 2024 and sell it today you would earn a total of 166.00 from holding HP Inc or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
HP Inc vs. FNCB Bancorp
Performance |
| Timeline |
| HP Inc |
| FNCB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
HP and FNCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HP and FNCB Bancorp
The main advantage of trading using opposite HP and FNCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP position performs unexpectedly, FNCB 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 FNCB Bancorp will offset losses from the drop in FNCB Bancorp's long position.The idea behind HP Inc and FNCB Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FNCB Bancorp vs. Home Federal Bancorp | FNCB Bancorp vs. LINKBANCORP | FNCB Bancorp vs. Rhinebeck Bancorp | FNCB 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |