Correlation Between Virginia National and Blue Ridge
Can any of the company-specific risk be diversified away by investing in both Virginia National and Blue Ridge 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 Blue Ridge 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 Blue Ridge Bankshares, you can compare the effects of market volatilities on Virginia National and Blue Ridge 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 Blue Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Blue Ridge.
Diversification Opportunities for Virginia National and Blue Ridge
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Blue is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Blue Ridge Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Ridge 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 Blue Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Ridge Bankshares has no effect on the direction of Virginia National i.e., Virginia National and Blue Ridge go up and down completely randomly.
Pair Corralation between Virginia National and Blue Ridge
Given the investment horizon of 90 days Virginia National is expected to generate 34.8 times less return on investment than Blue Ridge. But when comparing it to its historical volatility, Virginia National Bankshares is 1.72 times less risky than Blue Ridge. It trades about 0.01 of its potential returns per unit of risk. Blue Ridge Bankshares is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Blue Ridge Bankshares on August 29, 2024 and sell it today you would earn a total of 70.00 from holding Blue Ridge Bankshares or generate 25.0% 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. Blue Ridge Bankshares
Performance |
| Timeline |
| Virginia National |
| Blue Ridge Bankshares |
Virginia National and Blue Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Blue Ridge
The main advantage of trading using opposite Virginia National and Blue Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Blue Ridge 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 Blue Ridge will offset losses from the drop in Blue Ridge'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 |
| Blue Ridge vs. LINKBANCORP | Blue Ridge vs. Colony Bankcorp | Blue Ridge vs. Bankwell Financial Group | Blue Ridge vs. ECB Bancorp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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