Correlation Between Village Bank and William Penn
Can any of the company-specific risk be diversified away by investing in both Village Bank and William Penn 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 William Penn 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 William Penn Bancorp, you can compare the effects of market volatilities on Village Bank and William Penn 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 William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Bank and William Penn.
Diversification Opportunities for Village Bank and William Penn
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Village and William is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Village Bank and and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn Bancorp 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of Village Bank i.e., Village Bank and William Penn go up and down completely randomly.
Pair Corralation between Village Bank and William Penn
Given the investment horizon of 90 days Village Bank is expected to generate 18.25 times less return on investment than William Penn. But when comparing it to its historical volatility, Village Bank and is 3.17 times less risky than William Penn. It trades about 0.04 of its potential returns per unit of risk. William Penn Bancorp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,167 in William Penn Bancorp on November 9, 2024 and sell it today you would earn a total of 91.00 from holding William Penn Bancorp or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Village Bank and vs. William Penn Bancorp
Performance |
| Timeline |
| Village Bank |
| William Penn Bancorp |
Village Bank and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Bank and William Penn
The main advantage of trading using opposite Village Bank and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Bank position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn'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 |
| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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