Correlation Between Valley National and Heritage NOLA
Can any of the company-specific risk be diversified away by investing in both Valley National and Heritage NOLA 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 Valley National and Heritage NOLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valley National Bancorp and Heritage NOLA Bancorp, you can compare the effects of market volatilities on Valley National and Heritage NOLA 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 Valley National with a short position of Heritage NOLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valley National and Heritage NOLA.
Diversification Opportunities for Valley National and Heritage NOLA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valley and Heritage is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Valley National Bancorp and Heritage NOLA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage NOLA Bancorp and Valley National 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 Valley National Bancorp are associated (or correlated) with Heritage NOLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage NOLA Bancorp has no effect on the direction of Valley National i.e., Valley National and Heritage NOLA go up and down completely randomly.
Pair Corralation between Valley National and Heritage NOLA
Considering the 90-day investment horizon Valley National Bancorp is expected to generate 2.61 times more return on investment than Heritage NOLA. However, Valley National is 2.61 times more volatile than Heritage NOLA Bancorp. It trades about 0.06 of its potential returns per unit of risk. Heritage NOLA Bancorp is currently generating about -0.03 per unit of risk. If you would invest 912.00 in Valley National Bancorp on November 28, 2024 and sell it today you would earn a total of 39.00 from holding Valley National Bancorp or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valley National Bancorp vs. Heritage NOLA Bancorp
Performance |
| Timeline |
| Valley National Bancorp |
| Heritage NOLA Bancorp |
Valley National and Heritage NOLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valley National and Heritage NOLA
The main advantage of trading using opposite Valley National and Heritage NOLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valley National position performs unexpectedly, Heritage NOLA 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 Heritage NOLA will offset losses from the drop in Heritage NOLA's long position.| Valley National vs. Fulton Financial | Valley National vs. Webster Financial | Valley National vs. United Bankshares | Valley National vs. FNB Corp |
| Heritage NOLA vs. Rhinebeck Bancorp | Heritage NOLA vs. Bridgewater Bancshares Depositary | Heritage NOLA vs. Home Federal Bancorp | Heritage NOLA vs. LINKBANCORP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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