Correlation Between Investar Holding and Riverview Bancorp
Can any of the company-specific risk be diversified away by investing in both Investar Holding and Riverview Bancorp 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 Investar Holding and Riverview Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investar Holding Corp and Riverview Bancorp, you can compare the effects of market volatilities on Investar Holding and Riverview Bancorp 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 Investar Holding with a short position of Riverview Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investar Holding and Riverview Bancorp.
Diversification Opportunities for Investar Holding and Riverview Bancorp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Investar and Riverview is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and Riverview Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riverview Bancorp and Investar Holding 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 Investar Holding Corp are associated (or correlated) with Riverview Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riverview Bancorp has no effect on the direction of Investar Holding i.e., Investar Holding and Riverview Bancorp go up and down completely randomly.
Pair Corralation between Investar Holding and Riverview Bancorp
Given the investment horizon of 90 days Investar Holding is expected to generate 1.14 times less return on investment than Riverview Bancorp. In addition to that, Investar Holding is 1.97 times more volatile than Riverview Bancorp. It trades about 0.21 of its total potential returns per unit of risk. Riverview Bancorp is currently generating about 0.48 per unit of volatility. If you would invest 474.00 in Riverview Bancorp on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Riverview Bancorp or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investar Holding Corp vs. Riverview Bancorp
Performance |
| Timeline |
| Investar Holding Corp |
| Riverview Bancorp |
Investar Holding and Riverview Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investar Holding and Riverview Bancorp
The main advantage of trading using opposite Investar Holding and Riverview Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding position performs unexpectedly, Riverview Bancorp 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 Riverview Bancorp will offset losses from the drop in Riverview Bancorp's long position.| Investar Holding vs. Affinity Bancshares | Investar Holding vs. Auburn National Bancorporation | Investar Holding vs. First Community | Investar Holding vs. LINKBANCORP |
| Riverview Bancorp vs. Community West Bancshares | Riverview Bancorp vs. First Northwest Bancorp | Riverview Bancorp vs. Investar Holding Corp | Riverview Bancorp vs. Finward 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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