Correlation Between Ohio Valley and International Bancshares
Can any of the company-specific risk be diversified away by investing in both Ohio Valley and International Bancshares 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 Ohio Valley and International Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ohio Valley Banc and International Bancshares, you can compare the effects of market volatilities on Ohio Valley and International Bancshares 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 Ohio Valley with a short position of International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ohio Valley and International Bancshares.
Diversification Opportunities for Ohio Valley and International Bancshares
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ohio and International is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ohio Valley Banc and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Bancshares and Ohio Valley 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 Ohio Valley Banc are associated (or correlated) with International Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Bancshares has no effect on the direction of Ohio Valley i.e., Ohio Valley and International Bancshares go up and down completely randomly.
Pair Corralation between Ohio Valley and International Bancshares
Given the investment horizon of 90 days Ohio Valley Banc is expected to generate 1.98 times more return on investment than International Bancshares. However, Ohio Valley is 1.98 times more volatile than International Bancshares. It trades about 0.16 of its potential returns per unit of risk. International Bancshares is currently generating about -0.12 per unit of risk. If you would invest 2,426 in Ohio Valley Banc on September 12, 2024 and sell it today you would earn a total of 214.00 from holding Ohio Valley Banc or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ohio Valley Banc vs. International Bancshares
Performance |
| Timeline |
| Ohio Valley Banc |
| International Bancshares |
Ohio Valley and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ohio Valley and International Bancshares
The main advantage of trading using opposite Ohio Valley and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ohio Valley position performs unexpectedly, International Bancshares 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 International Bancshares will offset losses from the drop in International Bancshares' long position.| Ohio Valley vs. Home Federal Bancorp | Ohio Valley vs. Lake Shore Bancorp | Ohio Valley vs. Community West Bancshares | Ohio Valley vs. Magyar Bancorp |
| International Bancshares vs. JPMorgan Chase Co | International Bancshares vs. Citigroup | International Bancshares vs. Wells Fargo | International Bancshares vs. Toronto Dominion Bank |
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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