Correlation Between Virginia National and Sterling Bancorp
Can any of the company-specific risk be diversified away by investing in both Virginia National and Sterling Bancorp 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 Sterling Bancorp 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 Sterling Bancorp, you can compare the effects of market volatilities on Virginia National and Sterling Bancorp 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 Sterling Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Sterling Bancorp.
Diversification Opportunities for Virginia National and Sterling Bancorp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virginia and Sterling is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Sterling Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Bancorp 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 Sterling Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Bancorp has no effect on the direction of Virginia National i.e., Virginia National and Sterling Bancorp go up and down completely randomly.
Pair Corralation between Virginia National and Sterling Bancorp
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 1.77 times more return on investment than Sterling Bancorp. However, Virginia National is 1.77 times more volatile than Sterling Bancorp. It trades about 0.17 of its potential returns per unit of risk. Sterling Bancorp is currently generating about 0.17 per unit of risk. If you would invest 3,995 in Virginia National Bankshares on August 26, 2024 and sell it today you would earn a total of 263.00 from holding Virginia National Bankshares or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Sterling Bancorp
Performance |
| Timeline |
| Virginia National |
| Sterling Bancorp |
Virginia National and Sterling Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Sterling Bancorp
The main advantage of trading using opposite Virginia National and Sterling Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Sterling Bancorp 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 Sterling Bancorp will offset losses from the drop in Sterling Bancorp's long position.| Virginia National vs. Fifth Third Bancorp | Virginia National vs. Zions Bancorporation | Virginia National vs. Huntington Bancshares Incorporated | Virginia National vs. PNC Financial Services |
| Sterling Bancorp vs. Home Federal Bancorp | Sterling Bancorp vs. Lake Shore Bancorp | Sterling Bancorp vs. Magyar Bancorp | Sterling Bancorp vs. Franklin Financial Services |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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