Correlation Between Heritage NOLA and Valley National
Can any of the company-specific risk be diversified away by investing in both Heritage NOLA and Valley National 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 Valley National 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 Valley National Bancorp, you can compare the effects of market volatilities on Heritage NOLA and Valley National 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 Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage NOLA and Valley National.
Diversification Opportunities for Heritage NOLA and Valley National
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heritage and Valley is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Heritage NOLA Bancorp and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National 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 Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of Heritage NOLA i.e., Heritage NOLA and Valley National go up and down completely randomly.
Pair Corralation between Heritage NOLA and Valley National
Given the investment horizon of 90 days Heritage NOLA Bancorp is expected to generate 0.64 times more return on investment than Valley National. However, Heritage NOLA Bancorp is 1.56 times less risky than Valley National. It trades about -0.04 of its potential returns per unit of risk. Valley National Bancorp is currently generating about -0.23 per unit of risk. If you would invest 1,501 in Heritage NOLA Bancorp on November 28, 2024 and sell it today you would lose (16.00) from holding Heritage NOLA Bancorp or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage NOLA Bancorp vs. Valley National Bancorp
Performance |
| Timeline |
| Heritage NOLA Bancorp |
| Valley National Bancorp |
Heritage NOLA and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage NOLA and Valley National
The main advantage of trading using opposite Heritage NOLA and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage NOLA position performs unexpectedly, Valley National 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 Valley National will offset losses from the drop in Valley National's long position.| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
| Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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