Correlation Between VersaBank and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both VersaBank and First Hawaiian 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 VersaBank and First Hawaiian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and First Hawaiian, you can compare the effects of market volatilities on VersaBank and First Hawaiian 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 VersaBank with a short position of First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and First Hawaiian.
Diversification Opportunities for VersaBank and First Hawaiian
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VersaBank and First is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian and VersaBank 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 VersaBank are associated (or correlated) with First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of VersaBank i.e., VersaBank and First Hawaiian go up and down completely randomly.
Pair Corralation between VersaBank and First Hawaiian
Given the investment horizon of 90 days VersaBank is expected to generate 0.71 times more return on investment than First Hawaiian. However, VersaBank is 1.41 times less risky than First Hawaiian. It trades about 0.42 of its potential returns per unit of risk. First Hawaiian is currently generating about 0.19 per unit of risk. If you would invest 1,475 in VersaBank on August 29, 2024 and sell it today you would earn a total of 298.00 from holding VersaBank or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. First Hawaiian
Performance |
| Timeline |
| VersaBank |
| First Hawaiian |
VersaBank and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and First Hawaiian
The main advantage of trading using opposite VersaBank and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.| VersaBank vs. Mountain Commerce Bancorp | VersaBank vs. American Riviera Bank | VersaBank vs. Home Federal Bancorp | VersaBank vs. Prime Meridian Holding |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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