Correlation Between Ponce Financial and HV Bancorp

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

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

Diversification Opportunities for Ponce Financial and HV Bancorp

0.0

Correlation Coefficient

Ponce Financial  HV Bancorp

Pay attention - limited upside

The 3 months correlation between Ponce and HVBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ponce Financial Group and HV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HV Bancorp and Ponce Financial 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 Ponce Financial Group 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 Ponce Financial i.e., Ponce Financial and HV Bancorp go up and down completely randomly.

Pair Corralation between Ponce Financial and HV Bancorp

If you would invest  1,248  in Ponce Financial Group on December 19, 2024 and sell it today you would earn a total of  27.00  from holding Ponce Financial Group or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ponce Financial Group  vs.  HV Bancorp

Ponce Financial Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ponce Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Ponce Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

HV Bancorp

Risk-Adjusted Performance

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 Ponce Financial and HV Bancorp

The main advantage of trading using opposite Ponce Financial and HV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ponce Financial 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 Ponce Financial Group 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.