Correlation Between Heritage NOLA and Jeffersonville Bancorp
Can any of the company-specific risk be diversified away by investing in both Heritage NOLA and Jeffersonville 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 NOLA and Jeffersonville Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage NOLA Bancorp and Jeffersonville Bancorp, you can compare the effects of market volatilities on Heritage NOLA and Jeffersonville 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 NOLA with a short position of Jeffersonville Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage NOLA and Jeffersonville Bancorp.
Diversification Opportunities for Heritage NOLA and Jeffersonville Bancorp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heritage and Jeffersonville is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Heritage NOLA Bancorp and Jeffersonville Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffersonville Bancorp and Heritage NOLA 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 NOLA Bancorp are associated (or correlated) with Jeffersonville Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffersonville Bancorp has no effect on the direction of Heritage NOLA i.e., Heritage NOLA and Jeffersonville Bancorp go up and down completely randomly.
Pair Corralation between Heritage NOLA and Jeffersonville Bancorp
Given the investment horizon of 90 days Heritage NOLA Bancorp is expected to generate 1.85 times more return on investment than Jeffersonville Bancorp. However, Heritage NOLA is 1.85 times more volatile than Jeffersonville Bancorp. It trades about 0.01 of its potential returns per unit of risk. Jeffersonville Bancorp is currently generating about -0.02 per unit of risk. If you would invest 1,585 in Heritage NOLA Bancorp on August 30, 2024 and sell it today you would lose (188.00) from holding Heritage NOLA Bancorp or give up 11.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Heritage NOLA Bancorp vs. Jeffersonville Bancorp
Performance |
| Timeline |
| Heritage NOLA Bancorp |
| Jeffersonville Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Heritage NOLA and Jeffersonville Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage NOLA and Jeffersonville Bancorp
The main advantage of trading using opposite Heritage NOLA and Jeffersonville Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage NOLA position performs unexpectedly, Jeffersonville 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 Jeffersonville Bancorp will offset losses from the drop in Jeffersonville Bancorp's long position.| Heritage NOLA vs. Israel Discount Bank | Heritage NOLA vs. Baraboo Bancorporation | Heritage NOLA vs. Danske Bank AS | Heritage NOLA vs. Jyske Bank AS |
| Jeffersonville Bancorp vs. Heritage NOLA Bancorp | Jeffersonville Bancorp vs. Rhinebeck Bancorp | Jeffersonville Bancorp vs. Bridgewater Bancshares Depositary | Jeffersonville Bancorp vs. Bank of Marin |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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