Correlation Between Veritex Holdings and Amerant Bancorp
Can any of the company-specific risk be diversified away by investing in both Veritex Holdings and Amerant Bancorp 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 Veritex Holdings and Amerant Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veritex Holdings and Amerant Bancorp, you can compare the effects of market volatilities on Veritex Holdings and Amerant Bancorp 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 Veritex Holdings with a short position of Amerant Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veritex Holdings and Amerant Bancorp.
Diversification Opportunities for Veritex Holdings and Amerant Bancorp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Veritex and Amerant is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Veritex Holdings and Amerant Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerant Bancorp and Veritex Holdings 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 Veritex Holdings are associated (or correlated) with Amerant Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerant Bancorp has no effect on the direction of Veritex Holdings i.e., Veritex Holdings and Amerant Bancorp go up and down completely randomly.
Pair Corralation between Veritex Holdings and Amerant Bancorp
Given the investment horizon of 90 days Veritex Holdings is expected to generate 0.92 times more return on investment than Amerant Bancorp. However, Veritex Holdings is 1.09 times less risky than Amerant Bancorp. It trades about 0.07 of its potential returns per unit of risk. Amerant Bancorp is currently generating about 0.02 per unit of risk. If you would invest 2,245 in Veritex Holdings on August 25, 2024 and sell it today you would earn a total of 762.00 from holding Veritex Holdings or generate 33.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veritex Holdings vs. Amerant Bancorp
Performance |
| Timeline |
| Veritex Holdings |
| Amerant Bancorp |
Veritex Holdings and Amerant Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veritex Holdings and Amerant Bancorp
The main advantage of trading using opposite Veritex Holdings and Amerant Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veritex Holdings position performs unexpectedly, Amerant Bancorp 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 Amerant Bancorp will offset losses from the drop in Amerant Bancorp's long position.| Veritex Holdings vs. Fifth Third Bancorp | Veritex Holdings vs. Zions Bancorporation | Veritex Holdings vs. Huntington Bancshares Incorporated | Veritex Holdings vs. PNC Financial Services |
| Amerant Bancorp vs. Affinity Bancshares | Amerant Bancorp vs. Southern California Bancorp | Amerant Bancorp vs. Auburn National Bancorporation | Amerant Bancorp vs. BayCom Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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