Correlation Between Virginia National and Valley National
Can any of the company-specific risk be diversified away by investing in both Virginia National and Valley National 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 Valley National 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 Valley National Bancorp, you can compare the effects of market volatilities on Virginia National and Valley National 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 Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Valley National.
Diversification Opportunities for Virginia National and Valley National
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virginia and Valley is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National 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 Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of Virginia National i.e., Virginia National and Valley National go up and down completely randomly.
Pair Corralation between Virginia National and Valley National
Given the investment horizon of 90 days Virginia National is expected to generate 2.29 times less return on investment than Valley National. In addition to that, Virginia National is 1.35 times more volatile than Valley National Bancorp. It trades about 0.01 of its total potential returns per unit of risk. Valley National Bancorp is currently generating about 0.04 per unit of volatility. If you would invest 1,816 in Valley National Bancorp on December 12, 2024 and sell it today you would earn a total of 644.00 from holding Valley National Bancorp or generate 35.46% 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. Valley National Bancorp
Performance |
| Timeline |
| Virginia National |
| Valley National Bancorp |
Virginia National and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Valley National
The main advantage of trading using opposite Virginia National and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Valley National 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 Valley National will offset losses from the drop in Valley National's long position.| Virginia National vs. Finward Bancorp | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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