Correlation Between Old Point and Heritage Financial
Can any of the company-specific risk be diversified away by investing in both Old Point and Heritage Financial 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 Old Point and Heritage Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Point Financial and Heritage Financial, you can compare the effects of market volatilities on Old Point and Heritage Financial 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 Old Point with a short position of Heritage Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and Heritage Financial.
Diversification Opportunities for Old Point and Heritage Financial
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and Heritage is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and Heritage Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Financial and Old Point 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 Old Point Financial are associated (or correlated) with Heritage Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Financial has no effect on the direction of Old Point i.e., Old Point and Heritage Financial go up and down completely randomly.
Pair Corralation between Old Point and Heritage Financial
Given the investment horizon of 90 days Old Point Financial is expected to generate 1.53 times more return on investment than Heritage Financial. However, Old Point is 1.53 times more volatile than Heritage Financial. It trades about 0.31 of its potential returns per unit of risk. Heritage Financial is currently generating about 0.0 per unit of risk. If you would invest 2,510 in Old Point Financial on November 18, 2024 and sell it today you would earn a total of 440.00 from holding Old Point Financial or generate 17.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Point Financial vs. Heritage Financial
Performance |
| Timeline |
| Old Point Financial |
| Heritage Financial |
Old Point and Heritage Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and Heritage Financial
The main advantage of trading using opposite Old Point and Heritage Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point position performs unexpectedly, Heritage Financial 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 Financial will offset losses from the drop in Heritage Financial's long position.| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home Bancorp |
| Heritage Financial vs. Heritage Commerce Corp | Heritage Financial vs. Horizon Bancorp | Heritage Financial vs. Independent Bank | Heritage Financial vs. Great Southern 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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