Correlation Between Equity Bancshares, and Hanover Bancorp

Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and Hanover 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 Equity Bancshares, and Hanover Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equity Bancshares, and Hanover Bancorp, you can compare the effects of market volatilities on Equity Bancshares, and Hanover 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 Equity Bancshares, with a short position of Hanover Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Hanover Bancorp.

Diversification Opportunities for Equity Bancshares, and Hanover Bancorp

0.77

Correlation Coefficient

Equity Bancshares,  Hanover Bancorp

Poor diversification

The 3 months correlation between Equity and Hanover is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Hanover Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Bancorp and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Hanover Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Bancorp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Hanover Bancorp go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Hanover Bancorp

Given the investment horizon of 90 days Equity Bancshares, is expected to generate 1.43 times more return on investment than Hanover Bancorp. However, Equity Bancshares, is 1.43 times more volatile than Hanover Bancorp. It trades about 0.04 of its potential returns per unit of risk. Hanover Bancorp is currently generating about 0.03 per unit of risk. If you would invest  3,162  in Equity Bancshares, on September 23, 2024 and sell it today you would earn a total of  1,070  from holding Equity Bancshares, or generate 33.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Equity Bancshares,  vs.  Hanover Bancorp

Equity Bancshares,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Equity Bancshares, is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Hanover Bancorp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanover Bancorp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Hanover Bancorp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equity Bancshares, and Hanover Bancorp

The main advantage of trading using opposite Equity Bancshares, and Hanover Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, Hanover 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 Hanover Bancorp will offset losses from the drop in Hanover Bancorp's long position.

The idea behind Equity Bancshares, and Hanover 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.