Correlation Between Heritage Commerce and ST Bancorp
Can any of the company-specific risk be diversified away by investing in both Heritage Commerce and ST 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 Commerce and ST Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heritage Commerce Corp and ST Bancorp, you can compare the effects of market volatilities on Heritage Commerce and ST 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 Commerce with a short position of ST Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heritage Commerce and ST Bancorp.
Diversification Opportunities for Heritage Commerce and ST Bancorp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heritage and STBA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Commerce Corp and ST Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Bancorp and Heritage Commerce 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 Commerce Corp are associated (or correlated) with ST Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Bancorp has no effect on the direction of Heritage Commerce i.e., Heritage Commerce and ST Bancorp go up and down completely randomly.
Pair Corralation between Heritage Commerce and ST Bancorp
Given the investment horizon of 90 days Heritage Commerce Corp is expected to generate 0.97 times more return on investment than ST Bancorp. However, Heritage Commerce Corp is 1.03 times less risky than ST Bancorp. It trades about 0.19 of its potential returns per unit of risk. ST Bancorp is currently generating about 0.18 per unit of risk. If you would invest 958.00 in Heritage Commerce Corp on August 25, 2024 and sell it today you would earn a total of 133.00 from holding Heritage Commerce Corp or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heritage Commerce Corp vs. ST Bancorp
Performance |
| Timeline |
| Heritage Commerce Corp |
| ST Bancorp |
Heritage Commerce and ST Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heritage Commerce and ST Bancorp
The main advantage of trading using opposite Heritage Commerce and ST Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heritage Commerce position performs unexpectedly, ST 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 ST Bancorp will offset losses from the drop in ST Bancorp's long position.| Heritage Commerce vs. Home Federal Bancorp | Heritage Commerce vs. First Financial Northwest | Heritage Commerce vs. First Northwest Bancorp | Heritage Commerce vs. First Capital |
| ST Bancorp vs. CrossFirst Bankshares | ST Bancorp vs. Enterprise Financial Services | ST Bancorp vs. The First Bancshares, | ST Bancorp vs. First 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |