Correlation Between Tectonic Financial and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and SHF Holdings 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 Tectonic Financial and SHF Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and SHF Holdings, you can compare the effects of market volatilities on Tectonic Financial and SHF Holdings 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 Tectonic Financial with a short position of SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and SHF Holdings.
Diversification Opportunities for Tectonic Financial and SHF Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tectonic and SHF is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF Holdings and Tectonic Financial 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 Tectonic Financial PR are associated (or correlated) with SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and SHF Holdings go up and down completely randomly.
Pair Corralation between Tectonic Financial and SHF Holdings
Assuming the 90 days horizon Tectonic Financial is expected to generate 9.39 times less return on investment than SHF Holdings. But when comparing it to its historical volatility, Tectonic Financial PR is 4.74 times less risky than SHF Holdings. It trades about 0.12 of its potential returns per unit of risk. SHF Holdings is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 38.00 in SHF Holdings on November 8, 2024 and sell it today you would earn a total of 10.00 from holding SHF Holdings or generate 26.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tectonic Financial PR vs. SHF Holdings
Performance |
| Timeline |
| Tectonic Financial |
| SHF Holdings |
Tectonic Financial and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and SHF Holdings
The main advantage of trading using opposite Tectonic Financial and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, SHF Holdings 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 SHF Holdings will offset losses from the drop in SHF Holdings' long position.| Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants | Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary |
| SHF Holdings vs. Finward Bancorp | SHF Holdings vs. Northfield Bancorp | SHF Holdings vs. Community West Bancshares | SHF Holdings vs. First Community |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |