Correlation Between NBT Bancorp and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both NBT Bancorp and Heritage NOLA 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 NBT Bancorp and Heritage NOLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBT Bancorp and Heritage NOLA Bancorp, you can compare the effects of market volatilities on NBT Bancorp and Heritage NOLA 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 NBT Bancorp with a short position of Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBT Bancorp and Heritage NOLA.
Diversification Opportunities for NBT Bancorp and Heritage NOLA
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NBT and Heritage is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding NBT Bancorp and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp and NBT 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 NBT Bancorp are associated (or correlated) with Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of NBT Bancorp i.e., NBT Bancorp and Heritage NOLA go up and down completely randomly.
Pair Corralation between NBT Bancorp and Heritage NOLA
Given the investment horizon of 90 days NBT Bancorp is expected to under-perform the Heritage NOLA. In addition to that, NBT Bancorp is 1.76 times more volatile than Heritage NOLA Bancorp. It trades about -0.06 of its total potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about -0.04 per unit of volatility. If you would invest 1,501 in Heritage NOLA Bancorp on November 28, 2024 and sell it today you would lose (16.00) from holding Heritage NOLA Bancorp or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBT Bancorp vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| NBT Bancorp |
| Heritage NOLA Bancorp |
NBT Bancorp and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBT Bancorp and Heritage NOLA
The main advantage of trading using opposite NBT Bancorp and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBT Bancorp position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA's long position.| NBT Bancorp vs. Oak Valley Bancorp | NBT Bancorp vs. Home Federal Bancorp | NBT Bancorp vs. Finward Bancorp | NBT Bancorp vs. Community West Bancshares |
| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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