Correlation Between Riverview Bancorp and John Marshall

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

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

Diversification Opportunities for Riverview Bancorp and John Marshall

0.64

Correlation Coefficient

Riverview Bancorp  John Marshall

Poor diversification

The 3 months correlation between Riverview and John is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Riverview Bancorp and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall Bancorp and Riverview Bancorp 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 Riverview Bancorp are associated (or correlated) with John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of Riverview Bancorp i.e., Riverview Bancorp and John Marshall go up and down completely randomly.

Pair Corralation between Riverview Bancorp and John Marshall

Given the investment horizon of 90 days Riverview Bancorp is expected to generate 0.45 times more return on investment than John Marshall. However, Riverview Bancorp is 2.24 times less risky than John Marshall. It trades about -0.05 of its potential returns per unit of risk. John Marshall Bancorp is currently generating about -0.12 per unit of risk. If you would invest  573.00  in Riverview Bancorp on December 29, 2024 and sell it today you would lose (20.00) from holding Riverview Bancorp or give up 3.49% of portfolio value over 90 days.

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

Riverview Bancorp  vs.  John Marshall Bancorp

Riverview Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Riverview Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Riverview Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

John Marshall Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days John Marshall Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Riverview Bancorp and John Marshall

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

The idea behind Riverview Bancorp and John Marshall 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.