Correlation Between HV Bancorp and National Bankshares
Can any of the company-specific risk be diversified away by investing in both HV Bancorp and National Bankshares 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 National Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HV Bancorp and National Bankshares, you can compare the effects of market volatilities on HV Bancorp and National Bankshares 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 National Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and National Bankshares.
Diversification Opportunities for HV Bancorp and National Bankshares
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HVBC and National is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding HV Bancorp and National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bankshares 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 National Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bankshares has no effect on the direction of HV Bancorp i.e., HV Bancorp and National Bankshares go up and down completely randomly.
Pair Corralation between HV Bancorp and National Bankshares
If you would invest 2,794 in National Bankshares on November 3, 2024 and sell it today you would earn a total of 145.00 from holding National Bankshares or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
HV Bancorp vs. National Bankshares
Performance |
| Timeline |
| HV Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Bankshares |
HV Bancorp and National Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HV Bancorp and National Bankshares
The main advantage of trading using opposite HV Bancorp and National Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HV Bancorp position performs unexpectedly, National Bankshares 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 National Bankshares will offset losses from the drop in National Bankshares' 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 |
| National Bankshares vs. Finward Bancorp | National Bankshares vs. Community West Bancshares | National Bankshares vs. First Financial Northwest | National Bankshares 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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