Correlation Between HV Bancorp and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and Foreign Trade 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 HV Bancorp and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and Foreign Trade Bank, you can compare the effects of market volatilities on HV Bancorp and Foreign Trade 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 HV Bancorp with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and Foreign Trade.
Diversification Opportunities for HV Bancorp and Foreign Trade
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HVBC and Foreign is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank and HV Bancorp 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 HV Bancorp are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of HV Bancorp i.e., HV Bancorp and Foreign Trade go up and down completely randomly.
Pair Corralation between HV Bancorp and Foreign Trade
Given the investment horizon of 90 days HV Bancorp is expected to generate 0.89 times more return on investment than Foreign Trade. However, HV Bancorp is 1.12 times less risky than Foreign Trade. It trades about 0.42 of its potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.1 per unit of risk. If you would invest 3,299 in HV Bancorp on August 31, 2024 and sell it today you would earn a total of 161.00 from holding HV Bancorp or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.14% |
| Values | Daily Returns |
HV Bancorp vs. Foreign Trade Bank
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Foreign Trade Bank |
HV Bancorp and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and Foreign Trade
The main advantage of trading using opposite HV Bancorp and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| HV Bancorp vs. Magyar Bancorp | HV Bancorp vs. Home Federal Bancorp | HV Bancorp vs. Community West Bancshares | HV Bancorp vs. Lake Shore Bancorp |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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