Correlation Between Virginia National and Bar Harbor
Can any of the company-specific risk be diversified away by investing in both Virginia National and Bar Harbor 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 Virginia National and Bar Harbor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Bar Harbor Bankshares, you can compare the effects of market volatilities on Virginia National and Bar Harbor 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 Virginia National with a short position of Bar Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Bar Harbor.
Diversification Opportunities for Virginia National and Bar Harbor
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Bar is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Bar Harbor Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bar Harbor Bankshares and Virginia National 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 Virginia National Bankshares are associated (or correlated) with Bar Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bar Harbor Bankshares has no effect on the direction of Virginia National i.e., Virginia National and Bar Harbor go up and down completely randomly.
Pair Corralation between Virginia National and Bar Harbor
Given the investment horizon of 90 days Virginia National is expected to generate 1.04 times less return on investment than Bar Harbor. In addition to that, Virginia National is 1.1 times more volatile than Bar Harbor Bankshares. It trades about 0.05 of its total potential returns per unit of risk. Bar Harbor Bankshares is currently generating about 0.06 per unit of volatility. If you would invest 2,448 in Bar Harbor Bankshares on September 1, 2024 and sell it today you would earn a total of 1,151 from holding Bar Harbor Bankshares or generate 47.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Bar Harbor Bankshares
Performance |
| Timeline |
| Virginia National |
| Bar Harbor Bankshares |
Virginia National and Bar Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Bar Harbor
The main advantage of trading using opposite Virginia National and Bar Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Bar Harbor 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 Bar Harbor will offset losses from the drop in Bar Harbor's long position.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| Bar Harbor vs. Camden National | Bar Harbor vs. Bank of Marin | Bar Harbor vs. Arrow Financial | Bar Harbor vs. Auburn National Bancorporation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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