Correlation Between Heartland Financial and Columbia Banking
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and Columbia Banking 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 Financial and Columbia Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Columbia Banking System, you can compare the effects of market volatilities on Heartland Financial and Columbia Banking 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 Financial with a short position of Columbia Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Columbia Banking.
Diversification Opportunities for Heartland Financial and Columbia Banking
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Heartland and Columbia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Columbia Banking System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Banking System and Heartland Financial 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 Financial USA are associated (or correlated) with Columbia Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Banking System has no effect on the direction of Heartland Financial i.e., Heartland Financial and Columbia Banking go up and down completely randomly.
Pair Corralation between Heartland Financial and Columbia Banking
Given the investment horizon of 90 days Heartland Financial USA is expected to generate 0.86 times more return on investment than Columbia Banking. However, Heartland Financial USA is 1.16 times less risky than Columbia Banking. It trades about 0.12 of its potential returns per unit of risk. Columbia Banking System is currently generating about 0.07 per unit of risk. If you would invest 2,740 in Heartland Financial USA on August 28, 2024 and sell it today you would earn a total of 4,155 from holding Heartland Financial USA or generate 151.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Columbia Banking System
Performance |
| Timeline |
| Heartland Financial USA |
| Columbia Banking System |
Heartland Financial and Columbia Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Columbia Banking
The main advantage of trading using opposite Heartland Financial and Columbia Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, Columbia Banking 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 Columbia Banking will offset losses from the drop in Columbia Banking's long position.| Heartland Financial vs. Heritage Commerce Corp | Heartland Financial vs. Business First Bancshares | Heartland Financial vs. German American Bancorp | Heartland Financial vs. Texas Capital Bancshares |
| Columbia Banking vs. Glacier Bancorp | Columbia Banking vs. CVB Financial | Columbia Banking vs. Independent Bank Group | Columbia Banking vs. First Financial 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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