Correlation Between Victory Bancorp and Community Investors
Can any of the company-specific risk be diversified away by investing in both Victory Bancorp and Community Investors 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 Victory Bancorp and Community Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Victory Bancorp and Community Investors Bancorp, you can compare the effects of market volatilities on Victory Bancorp and Community Investors 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 Victory Bancorp with a short position of Community Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Bancorp and Community Investors.
Diversification Opportunities for Victory Bancorp and Community Investors
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victory and Community is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding The Victory Bancorp and Community Investors Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Investors and Victory Bancorp 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 The Victory Bancorp are associated (or correlated) with Community Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Investors has no effect on the direction of Victory Bancorp i.e., Victory Bancorp and Community Investors go up and down completely randomly.
Pair Corralation between Victory Bancorp and Community Investors
Given the investment horizon of 90 days The Victory Bancorp is expected to under-perform the Community Investors. In addition to that, Victory Bancorp is 5.41 times more volatile than Community Investors Bancorp. It trades about -0.03 of its total potential returns per unit of risk. Community Investors Bancorp is currently generating about 0.29 per unit of volatility. If you would invest 1,650 in Community Investors Bancorp on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Community Investors Bancorp or generate 3.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 7.5% |
Values | Daily Returns |
The Victory Bancorp vs. Community Investors Bancorp
Performance |
Timeline |
Victory Bancorp |
Community Investors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Victory Bancorp and Community Investors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Victory Bancorp and Community Investors
The main advantage of trading using opposite Victory Bancorp and Community Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Bancorp position performs unexpectedly, Community Investors 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 Community Investors will offset losses from the drop in Community Investors' long position.The idea behind The Victory Bancorp and Community Investors Bancorp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Community Investors vs. CIB Marine Bancshares | Community Investors vs. United Bancorporation of | Community Investors vs. U I Financial | Community Investors vs. CoastalSouth Bancshares |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |