Correlation Between Virginia National and BOK Financial
Can any of the company-specific risk be diversified away by investing in both Virginia National and BOK 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 Virginia National and BOK Financial 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 BOK Financial, you can compare the effects of market volatilities on Virginia National and BOK 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 Virginia National with a short position of BOK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and BOK Financial.
Diversification Opportunities for Virginia National and BOK Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and BOK is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and BOK Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOK Financial 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 BOK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOK Financial has no effect on the direction of Virginia National i.e., Virginia National and BOK Financial go up and down completely randomly.
Pair Corralation between Virginia National and BOK Financial
Given the investment horizon of 90 days Virginia National is expected to generate 2.2 times less return on investment than BOK Financial. But when comparing it to its historical volatility, Virginia National Bankshares is 1.56 times less risky than BOK Financial. It trades about 0.09 of its potential returns per unit of risk. BOK Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10,736 in BOK Financial on August 24, 2024 and sell it today you would earn a total of 829.00 from holding BOK Financial or generate 7.72% 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. BOK Financial
Performance |
| Timeline |
| Virginia National |
| BOK Financial |
Virginia National and BOK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and BOK Financial
The main advantage of trading using opposite Virginia National and BOK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, BOK 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 BOK Financial will offset losses from the drop in BOK Financial's long position.| Virginia National vs. Banco Bradesco SA | Virginia National vs. Itau Unibanco Banco | Virginia National vs. Banco Santander Brasil | Virginia National vs. Western Alliance Bancorporation |
| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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