Correlation Between HV Bancorp and Independent Bank
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and Independent Bank 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 Independent Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and Independent Bank, you can compare the effects of market volatilities on HV Bancorp and Independent Bank 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 Independent Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and Independent Bank.
Diversification Opportunities for HV Bancorp and Independent Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HVBC and Independent is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and Independent Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independent 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 Independent Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independent Bank has no effect on the direction of HV Bancorp i.e., HV Bancorp and Independent Bank go up and down completely randomly.
Pair Corralation between HV Bancorp and Independent Bank
If you would invest 4,973 in Independent Bank on August 29, 2024 and sell it today you would earn a total of 2,363 from holding Independent Bank or generate 47.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
HV Bancorp vs. Independent Bank
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Independent Bank |
HV Bancorp and Independent Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and Independent Bank
The main advantage of trading using opposite HV Bancorp and Independent Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, Independent Bank 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 Independent Bank will offset losses from the drop in Independent Bank'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 |
| Independent Bank vs. Capitol Federal Financial | Independent Bank vs. BankFinancial | Independent Bank vs. Business First Bancshares | Independent Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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