Correlation Between SHF Holdings and International Bancshares
Can any of the company-specific risk be diversified away by investing in both SHF Holdings 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 SHF Holdings and International Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHF Holdings and International Bancshares, you can compare the effects of market volatilities on SHF Holdings 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 SHF Holdings with a short position of International Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHF Holdings and International Bancshares.
Diversification Opportunities for SHF Holdings and International Bancshares
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SHF and International is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SHF Holdings and International Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Bancshares and SHF Holdings 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 SHF Holdings 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 SHF Holdings i.e., SHF Holdings and International Bancshares go up and down completely randomly.
Pair Corralation between SHF Holdings and International Bancshares
Assuming the 90 days horizon SHF Holdings is expected to generate 58.74 times more return on investment than International Bancshares. However, SHF Holdings is 58.74 times more volatile than International Bancshares. It trades about 0.11 of its potential returns per unit of risk. International Bancshares is currently generating about 0.06 per unit of risk. If you would invest 4.01 in SHF Holdings on September 12, 2024 and sell it today you would lose (1.17) from holding SHF Holdings or give up 29.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.84% |
| Values | Daily Returns |
SHF Holdings vs. International Bancshares
Performance |
| Timeline |
| SHF Holdings |
| International Bancshares |
SHF Holdings and International Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHF Holdings and International Bancshares
The main advantage of trading using opposite SHF Holdings and International Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHF Holdings 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.| SHF Holdings vs. Toro Co | SHF Holdings vs. Estee Lauder Companies | SHF Holdings vs. Pinterest | SHF Holdings vs. Grupo Televisa SAB |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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