Correlation Between Virginia National and Five Star
Can any of the company-specific risk be diversified away by investing in both Virginia National and Five Star 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 Virginia National and Five Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Five Star Bancorp, you can compare the effects of market volatilities on Virginia National and Five Star 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 Virginia National with a short position of Five Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Five Star.
Diversification Opportunities for Virginia National and Five Star
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virginia and Five is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Five Star Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Star Bancorp and Virginia National 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 Virginia National Bankshares are associated (or correlated) with Five Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Star Bancorp has no effect on the direction of Virginia National i.e., Virginia National and Five Star go up and down completely randomly.
Pair Corralation between Virginia National and Five Star
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 1.18 times more return on investment than Five Star. However, Virginia National is 1.18 times more volatile than Five Star Bancorp. It trades about 0.01 of its potential returns per unit of risk. Five Star Bancorp is currently generating about -0.07 per unit of risk. If you would invest 3,756 in Virginia National Bankshares on December 28, 2024 and sell it today you would lose (11.00) from holding Virginia National Bankshares or give up 0.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Virginia National Bankshares vs. Five Star Bancorp
Performance |
Timeline |
Virginia National |
Five Star Bancorp |
Virginia National and Five Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virginia National and Five Star
The main advantage of trading using opposite Virginia National and Five Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Five Star 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 Five Star will offset losses from the drop in Five Star's long position.Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
Five Star vs. Community West Bancshares | Five Star vs. First Northwest Bancorp | Five Star vs. Home Federal Bancorp | Five Star vs. First Financial Northwest |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Stocks Directory Find actively traded stocks across global markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |