Correlation Between Investar Holding and TC Bancshares

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

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

Diversification Opportunities for Investar Holding and TC Bancshares

0.34

Correlation Coefficient

Investar Holding  TC Bancshares

Weak diversification

The 3 months correlation between Investar and TCBC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Investar Holding Corp and TC Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Bancshares and Investar Holding 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 Investar Holding Corp are associated (or correlated) with TC Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Bancshares has no effect on the direction of Investar Holding i.e., Investar Holding and TC Bancshares go up and down completely randomly.

Pair Corralation between Investar Holding and TC Bancshares

If you would invest  2,007  in Investar Holding Corp on October 22, 2024 and sell it today you would earn a total of  5.00  from holding Investar Holding Corp or generate 0.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Investar Holding Corp  vs.  TC Bancshares

Investar Holding Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Investar Holding Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Investar Holding is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

TC Bancshares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TC Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, TC Bancshares is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Investar Holding and TC Bancshares

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

The idea behind Investar Holding Corp and TC Bancshares 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.