Correlation Between Equity Bancshares, and HarborOne Bancorp

Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and HarborOne 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 HarborOne 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 HarborOne Bancorp, you can compare the effects of market volatilities on Equity Bancshares, and HarborOne 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 HarborOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and HarborOne Bancorp.

Diversification Opportunities for Equity Bancshares, and HarborOne Bancorp

0.5

Correlation Coefficient

Equity Bancshares,  HarborOne Bancorp

Very weak diversification

The 3 months correlation between Equity and HarborOne is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and HarborOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HarborOne 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 HarborOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HarborOne Bancorp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and HarborOne Bancorp go up and down completely randomly.

Pair Corralation between Equity Bancshares, and HarborOne Bancorp

Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.72 times more return on investment than HarborOne Bancorp. However, Equity Bancshares, is 1.38 times less risky than HarborOne Bancorp. It trades about 0.16 of its potential returns per unit of risk. HarborOne Bancorp is currently generating about 0.02 per unit of risk. If you would invest  3,978  in Equity Bancshares, on September 4, 2024 and sell it today you would earn a total of  893.00  from holding Equity Bancshares, or generate 22.45% return on investment over 90 days.

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

Equity Bancshares,  vs.  HarborOne Bancorp

Equity Bancshares,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Equity Bancshares, disclosed solid returns over the last few months and may actually be approaching a breakup point.

HarborOne Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HarborOne Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, HarborOne Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Equity Bancshares, and HarborOne Bancorp

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

The idea behind Equity Bancshares, and HarborOne 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.