Correlation Between Virginia National and Guaranty Bancshares,

Can any of the company-specific risk be diversified away by investing in both Virginia National and Guaranty Bancshares, 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 Guaranty Bancshares, 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 Guaranty Bancshares,, you can compare the effects of market volatilities on Virginia National and Guaranty Bancshares, 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 Guaranty Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Guaranty Bancshares,.

Diversification Opportunities for Virginia National and Guaranty Bancshares,

0.7

Correlation Coefficient

Virginia National  Guaranty Bancshares,

Poor diversification

The 3 months correlation between Virginia and Guaranty is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Guaranty Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Bancshares, 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 Guaranty Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Bancshares, has no effect on the direction of Virginia National i.e., Virginia National and Guaranty Bancshares, go up and down completely randomly.

Pair Corralation between Virginia National and Guaranty Bancshares,

Given the investment horizon of 90 days Virginia National Bankshares is expected to under-perform the Guaranty Bancshares,. But the stock apears to be less risky and, when comparing its historical volatility, Virginia National Bankshares is 1.15 times less risky than Guaranty Bancshares,. The stock trades about -0.22 of its potential returns per unit of risk. The Guaranty Bancshares, is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  3,659  in Guaranty Bancshares, on September 20, 2024 and sell it today you would lose (277.00) from holding Guaranty Bancshares, or give up 7.57% of portfolio value over 90 days.

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

Virginia National Bankshares  vs.  Guaranty Bancshares,

Virginia National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virginia National Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Virginia National is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Guaranty Bancshares,

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Guaranty Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Guaranty Bancshares, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virginia National and Guaranty Bancshares,

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

The idea behind Virginia National Bankshares and Guaranty Bancshares, 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.