Correlation Between HV Bancorp and First Bancorp
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and First 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 First 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 First Bancorp, you can compare the effects of market volatilities on HV Bancorp and First 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and First Bancorp.
Diversification Opportunities for HV Bancorp and First Bancorp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HVBC and First is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of HV Bancorp i.e., HV Bancorp and First Bancorp go up and down completely randomly.
Pair Corralation between HV Bancorp and First Bancorp
If you would invest 2,688 in First Bancorp on August 31, 2024 and sell it today you would earn a total of 186.00 from holding First Bancorp or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.59% |
| Values | Daily Returns |
HV Bancorp vs. First Bancorp
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Bancorp |
HV Bancorp and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and First Bancorp
The main advantage of trading using opposite HV Bancorp and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, First 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 First Bancorp will offset losses from the drop in First 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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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