Correlation Between Veritex Holdings and Sterling Bancorp
Can any of the company-specific risk be diversified away by investing in both Veritex Holdings and Sterling 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 Sterling 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 Sterling Bancorp, you can compare the effects of market volatilities on Veritex Holdings and Sterling 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 Sterling Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veritex Holdings and Sterling Bancorp.
Diversification Opportunities for Veritex Holdings and Sterling Bancorp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Veritex and Sterling is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Veritex Holdings and Sterling Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling 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 Sterling Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Bancorp has no effect on the direction of Veritex Holdings i.e., Veritex Holdings and Sterling Bancorp go up and down completely randomly.
Pair Corralation between Veritex Holdings and Sterling Bancorp
Given the investment horizon of 90 days Veritex Holdings is expected to generate 3.12 times more return on investment than Sterling Bancorp. However, Veritex Holdings is 3.12 times more volatile than Sterling Bancorp. It trades about 0.17 of its potential returns per unit of risk. Sterling Bancorp is currently generating about 0.17 per unit of risk. If you would invest 2,690 in Veritex Holdings on August 26, 2024 and sell it today you would earn a total of 317.00 from holding Veritex Holdings or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veritex Holdings vs. Sterling Bancorp
Performance |
| Timeline |
| Veritex Holdings |
| Sterling Bancorp |
Veritex Holdings and Sterling Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veritex Holdings and Sterling Bancorp
The main advantage of trading using opposite Veritex Holdings and Sterling Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veritex Holdings position performs unexpectedly, Sterling 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 Sterling Bancorp will offset losses from the drop in Sterling 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 |
| Sterling Bancorp vs. Home Federal Bancorp | Sterling Bancorp vs. Lake Shore Bancorp | Sterling Bancorp vs. Magyar Bancorp | Sterling Bancorp vs. Franklin Financial Services |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |