Correlation Between Village Bank and Virginia National
Can any of the company-specific risk be diversified away by investing in both Village Bank and Virginia 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 Village Bank and Virginia National 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 Virginia National Bankshares, you can compare the effects of market volatilities on Village Bank and Virginia 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 Village Bank with a short position of Virginia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Bank and Virginia National.
Diversification Opportunities for Village Bank and Virginia National
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Village and Virginia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Village Bank and and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of Village Bank i.e., Village Bank and Virginia National go up and down completely randomly.
Pair Corralation between Village Bank and Virginia National
Given the investment horizon of 90 days Village Bank and is expected to generate 1.53 times more return on investment than Virginia National. However, Village Bank is 1.53 times more volatile than Virginia National Bankshares. It trades about 0.12 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about 0.03 per unit of risk. If you would invest 4,055 in Village Bank and on November 9, 2024 and sell it today you would earn a total of 3,815 from holding Village Bank and or generate 94.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.79% |
| Values | Daily Returns |
Village Bank and vs. Virginia National Bankshares
Performance |
| Timeline |
| Village Bank |
| Virginia National |
Village Bank and Virginia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Bank and Virginia National
The main advantage of trading using opposite Village Bank and Virginia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Bank position performs unexpectedly, Virginia 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 Virginia National will offset losses from the drop in Virginia National'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 |
| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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