Correlation Between HV Bancorp and John Marshall

Can any of the company-specific risk be diversified away by investing in both HV 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 HV 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 HV Bancorp and John Marshall Bancorp, you can compare the effects of market volatilities on HV 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 HV Bancorp with a short position of John Marshall. Check out your portfolio center. Please also check ongoing floating volatility patterns of HV Bancorp and John Marshall.

Diversification Opportunities for HV Bancorp and John Marshall

0.41

Correlation Coefficient

HV Bancorp  John Marshall

Very weak diversification

The 3 months correlation between HVBC and John is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding HV 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 HV 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 HV 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 HV Bancorp i.e., HV Bancorp and John Marshall go up and down completely randomly.

Pair Corralation between HV Bancorp and John Marshall

If you would invest  1,731  in John Marshall Bancorp on June 27, 2024 and sell it today you would earn a total of  159.00  from holding John Marshall Bancorp or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

HV Bancorp  vs.  John Marshall Bancorp

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.

John Marshall Bancorp

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in John Marshall Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, John Marshall may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with HV Bancorp and John Marshall

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

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.