Correlation Between MVB Financial and First Internet

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

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

Diversification Opportunities for MVB Financial and First Internet

0.79

Correlation Coefficient

MVB Financial  First Internet

Poor diversification

The 3 months correlation between MVB and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MVB Financial Corp and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp and MVB 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 MVB Financial Corp are associated (or correlated) with First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of MVB Financial i.e., MVB Financial and First Internet go up and down completely randomly.

Pair Corralation between MVB Financial and First Internet

Given the investment horizon of 90 days MVB Financial Corp is expected to generate 0.57 times more return on investment than First Internet. However, MVB Financial Corp is 1.77 times less risky than First Internet. It trades about 0.25 of its potential returns per unit of risk. First Internet Bancorp is currently generating about 0.01 per unit of risk. If you would invest  1,772  in MVB Financial Corp on May 2, 2025 and sell it today you would earn a total of  502.00  from holding MVB Financial Corp or generate 28.33% return on investment over 90 days.

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

MVB Financial Corp  vs.  First Internet Bancorp

MVB Financial Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MVB Financial Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, MVB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

First Internet Bancorp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Internet Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, First Internet is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MVB Financial and First Internet

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

The idea behind MVB Financial Corp and First Internet 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.