Correlation Between HV Bancorp and Investar Holding
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and Investar Holding 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 Investar Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and Investar Holding Corp, you can compare the effects of market volatilities on HV Bancorp and Investar Holding 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 Investar Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and Investar Holding.
Diversification Opportunities for HV Bancorp and Investar Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HVBC and Investar is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and Investar Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investar Holding Corp 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 Investar Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investar Holding Corp has no effect on the direction of HV Bancorp i.e., HV Bancorp and Investar Holding go up and down completely randomly.
Pair Corralation between HV Bancorp and Investar Holding
Given the investment horizon of 90 days HV Bancorp is expected to generate 0.89 times more return on investment than Investar Holding. However, HV Bancorp is 1.12 times less risky than Investar Holding. It trades about 0.1 of its potential returns per unit of risk. Investar Holding Corp is currently generating about 0.02 per unit of risk. If you would invest 2,683 in HV Bancorp on August 27, 2024 and sell it today you would earn a total of 777.00 from holding HV Bancorp or generate 28.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 27.02% |
| Values | Daily Returns |
HV Bancorp vs. Investar Holding Corp
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Investar Holding Corp |
HV Bancorp and Investar Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and Investar Holding
The main advantage of trading using opposite HV Bancorp and Investar Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, Investar Holding 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 Investar Holding will offset losses from the drop in Investar Holding'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 |
| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest 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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