Correlation Between Virginia National and First Busey
Can any of the company-specific risk be diversified away by investing in both Virginia National and First Busey 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 First Busey 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 First Busey Corp, you can compare the effects of market volatilities on Virginia National and First Busey 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 First Busey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and First Busey.
Diversification Opportunities for Virginia National and First Busey
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virginia and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and First Busey Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Busey Corp 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 First Busey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Busey Corp has no effect on the direction of Virginia National i.e., Virginia National and First Busey go up and down completely randomly.
Pair Corralation between Virginia National and First Busey
Given the investment horizon of 90 days Virginia National is expected to generate 1.87 times less return on investment than First Busey. In addition to that, Virginia National is 1.26 times more volatile than First Busey Corp. It trades about 0.15 of its total potential returns per unit of risk. First Busey Corp is currently generating about 0.37 per unit of volatility. If you would invest 2,238 in First Busey Corp on November 9, 2024 and sell it today you would earn a total of 297.00 from holding First Busey Corp or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. First Busey Corp
Performance |
| Timeline |
| Virginia National |
| First Busey Corp |
Virginia National and First Busey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and First Busey
The main advantage of trading using opposite Virginia National and First Busey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, First Busey 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 First Busey will offset losses from the drop in First Busey'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 |
| First Busey vs. Home Federal Bancorp | First Busey vs. First Financial Northwest | First Busey vs. First Northwest Bancorp | First Busey vs. First Capital |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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