Correlation Between Investar Holding and Western New
Can any of the company-specific risk be diversified away by investing in both Investar Holding and Western New 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 Western New 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 Western New England, you can compare the effects of market volatilities on Investar Holding and Western New 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 Western New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investar Holding and Western New.
Diversification Opportunities for Investar Holding and Western New
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investar and Western is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and Western New England in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western New England 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 Western New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western New England has no effect on the direction of Investar Holding i.e., Investar Holding and Western New go up and down completely randomly.
Pair Corralation between Investar Holding and Western New
Given the investment horizon of 90 days Investar Holding Corp is expected to generate 1.24 times more return on investment than Western New. However, Investar Holding is 1.24 times more volatile than Western New England. It trades about 0.01 of its potential returns per unit of risk. Western New England is currently generating about 0.01 per unit of risk. If you would invest 1,927 in Investar Holding Corp on November 2, 2024 and sell it today you would lose (34.00) from holding Investar Holding Corp or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investar Holding Corp vs. Western New England
Performance |
| Timeline |
| Investar Holding Corp |
| Western New England |
Investar Holding and Western New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investar Holding and Western New
The main advantage of trading using opposite Investar Holding and Western New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investar Holding position performs unexpectedly, Western New 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 Western New will offset losses from the drop in Western New's long position.| Investar Holding vs. Magyar Bancorp | Investar Holding vs. Home Federal Bancorp | Investar Holding vs. Community West Bancshares | Investar Holding vs. First Northwest Bancorp |
| Western New vs. IF Bancorp | Western New vs. Shore Bancshares | Western New vs. Colony Bankcorp | Western New vs. Investar Holding Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |