Correlation Between Independent Bank and Banca Monte
Can any of the company-specific risk be diversified away by investing in both Independent Bank and Banca Monte 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 Independent Bank and Banca Monte into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independent Bank Group and Banca Monte dei, you can compare the effects of market volatilities on Independent Bank and Banca Monte 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 Independent Bank with a short position of Banca Monte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independent Bank and Banca Monte.
Diversification Opportunities for Independent Bank and Banca Monte
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Independent and Banca is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Independent Bank Group and Banca Monte dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banca Monte dei and Independent Bank 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 Independent Bank Group are associated (or correlated) with Banca Monte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banca Monte dei has no effect on the direction of Independent Bank i.e., Independent Bank and Banca Monte go up and down completely randomly.
Pair Corralation between Independent Bank and Banca Monte
Given the investment horizon of 90 days Independent Bank Group is expected to generate 1.09 times more return on investment than Banca Monte. However, Independent Bank is 1.09 times more volatile than Banca Monte dei. It trades about 0.23 of its potential returns per unit of risk. Banca Monte dei is currently generating about 0.14 per unit of risk. If you would invest 5,702 in Independent Bank Group on September 4, 2024 and sell it today you would earn a total of 983.00 from holding Independent Bank Group or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Independent Bank Group vs. Banca Monte dei
Performance |
| Timeline |
| Independent Bank |
| Banca Monte dei |
Independent Bank and Banca Monte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independent Bank and Banca Monte
The main advantage of trading using opposite Independent Bank and Banca Monte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independent Bank position performs unexpectedly, Banca Monte 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 Banca Monte will offset losses from the drop in Banca Monte's long position.| Independent Bank vs. Heritage Financial | Independent Bank vs. ConnectOne Bancorp | Independent Bank vs. Home Bancorp | Independent Bank vs. National Bank Holdings |
| Banca Monte vs. First Hawaiian | Banca Monte vs. Central Pacific Financial | Banca Monte vs. Territorial Bancorp | Banca Monte vs. Comerica |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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