Correlation Between Village Bank and Logansport Financial
Can any of the company-specific risk be diversified away by investing in both Village Bank and Logansport 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 Village Bank and Logansport Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Bank and and Logansport Financial Corp, you can compare the effects of market volatilities on Village Bank and Logansport 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 Village Bank with a short position of Logansport Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Bank and Logansport Financial.
Diversification Opportunities for Village Bank and Logansport Financial
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Village and Logansport is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Village Bank and and Logansport Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logansport Financial Corp and Village Bank 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 Village Bank and are associated (or correlated) with Logansport Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logansport Financial Corp has no effect on the direction of Village Bank i.e., Village Bank and Logansport Financial go up and down completely randomly.
Pair Corralation between Village Bank and Logansport Financial
If you would invest 4,877 in Village Bank and on August 30, 2024 and sell it today you would earn a total of 2,913 from holding Village Bank and or generate 59.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.16% |
| Values | Daily Returns |
Village Bank and vs. Logansport Financial Corp
Performance |
| Timeline |
| Village Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Logansport Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Village Bank and Logansport Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Bank and Logansport Financial
The main advantage of trading using opposite Village Bank and Logansport Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Bank position performs unexpectedly, Logansport 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 Logansport Financial will offset losses from the drop in Logansport Financial's long position.| Village Bank vs. Prime Meridian Holding | Village Bank vs. William Penn Bancorp | Village Bank vs. Pathfinder Bancorp | Village Bank vs. Magyar 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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