Correlation Between HV Bancorp and ESSA Bancorp
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and ESSA 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 HV Bancorp and ESSA Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and ESSA Bancorp, you can compare the effects of market volatilities on HV Bancorp and ESSA 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 HV Bancorp with a short position of ESSA Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and ESSA Bancorp.
Diversification Opportunities for HV Bancorp and ESSA Bancorp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HVBC and ESSA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and ESSA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSA Bancorp 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 ESSA Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSA Bancorp has no effect on the direction of HV Bancorp i.e., HV Bancorp and ESSA Bancorp go up and down completely randomly.
Pair Corralation between HV Bancorp and ESSA Bancorp
Given the investment horizon of 90 days HV Bancorp is expected to generate 0.62 times more return on investment than ESSA Bancorp. However, HV Bancorp is 1.6 times less risky than ESSA Bancorp. It trades about 0.42 of its potential returns per unit of risk. ESSA Bancorp is currently generating about 0.04 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. ESSA Bancorp
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESSA Bancorp |
HV Bancorp and ESSA Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and ESSA Bancorp
The main advantage of trading using opposite HV Bancorp and ESSA Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, ESSA 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 ESSA Bancorp will offset losses from the drop in ESSA Bancorp'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 |
| ESSA Bancorp vs. Community West Bancshares | ESSA Bancorp vs. First Northwest Bancorp | ESSA Bancorp vs. First Community | ESSA Bancorp vs. Oak Valley 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |