Correlation Between Ottawa Savings and HV Bancorp

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

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

Diversification Opportunities for Ottawa Savings and HV Bancorp

-0.4

Correlation Coefficient

Ottawa Savings  HV Bancorp

Very good diversification

The 3 months correlation between Ottawa and HVBC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ottawa Savings Bancorp and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and Ottawa Savings 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 Ottawa Savings Bancorp are associated (or correlated) with HV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HV Bancorp has no effect on the direction of Ottawa Savings i.e., Ottawa Savings and HV Bancorp go up and down completely randomly.

Pair Corralation between Ottawa Savings and HV Bancorp

Given the investment horizon of 90 days Ottawa Savings Bancorp is expected to under-perform the HV Bancorp. But the otc stock apears to be less risky and, when comparing its historical volatility, Ottawa Savings Bancorp is 2.53 times less risky than HV Bancorp. The otc stock trades about -0.04 of its potential returns per unit of risk. The HV Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,750  in HV Bancorp on September 30, 2024 and sell it today you would earn a total of  710.00  from holding HV Bancorp or generate 25.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	19.64%
Values	Daily Returns

Ottawa Savings Bancorp  vs.  HV Bancorp

Ottawa Savings Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ottawa Savings Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ottawa Savings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HV Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HV Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, HV 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 Ottawa Savings and HV Bancorp

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

The idea behind Ottawa Savings Bancorp and HV 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.