Correlation Between Independent Bank and New York
Can any of the company-specific risk be diversified away by investing in both Independent Bank and New York 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 New York 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 New York Community, you can compare the effects of market volatilities on Independent Bank and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independent Bank and New York.
Diversification Opportunities for Independent Bank and New York
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Independent and New is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Independent Bank Group and New York Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Community 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Community has no effect on the direction of Independent Bank i.e., Independent Bank and New York go up and down completely randomly.
Pair Corralation between Independent Bank and New York
Given the investment horizon of 90 days Independent Bank Group is expected to generate 0.55 times more return on investment than New York. However, Independent Bank Group is 1.83 times less risky than New York. It trades about 0.02 of its potential returns per unit of risk. New York Community is currently generating about -0.01 per unit of risk. If you would invest 5,851 in Independent Bank Group on August 27, 2024 and sell it today you would earn a total of 698.00 from holding Independent Bank Group or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.97% |
| Values | Daily Returns |
Independent Bank Group vs. New York Community
Performance |
| Timeline |
| Independent Bank |
| New York Community |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Independent Bank and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Independent Bank and New York
The main advantage of trading using opposite Independent Bank and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independent Bank position performs unexpectedly, New York 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 New York will offset losses from the drop in New York's long position.| Independent Bank vs. Heritage Financial | Independent Bank vs. ConnectOne Bancorp | Independent Bank vs. Home Bancorp | Independent Bank vs. National Bank Holdings |
| New York vs. KeyCorp | New York vs. Fifth Third Bancorp | New York vs. Regions Financial | New York vs. Zions Bancorporation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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