Correlation Between Tidewater and Victory Bancorp

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

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

Diversification Opportunities for Tidewater and Victory Bancorp

-0.69

Correlation Coefficient

Tidewater  Victory Bancorp

Excellent diversification

The 3 months correlation between Tidewater and Victory is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tidewater and The Victory Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Bancorp and Tidewater 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 Tidewater are associated (or correlated) with Victory Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Bancorp has no effect on the direction of Tidewater i.e., Tidewater and Victory Bancorp go up and down completely randomly.

Pair Corralation between Tidewater and Victory Bancorp

Considering the 90-day investment horizon Tidewater is expected to generate 1.59 times more return on investment than Victory Bancorp. However, Tidewater is 1.59 times more volatile than The Victory Bancorp. It trades about 0.09 of its potential returns per unit of risk. The Victory Bancorp is currently generating about -0.13 per unit of risk. If you would invest  9,105  in Tidewater on January 26, 2024 and sell it today you would earn a total of  302.00  from holding Tidewater or generate 3.32% return on investment over 90 days.

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

Tidewater  vs.  The Victory Bancorp

Tidewater

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tidewater are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Tidewater showed solid returns over the last few months and may actually be approaching a breakup point.

Victory Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Victory Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Tidewater and Victory Bancorp

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

The idea behind Tidewater and The Victory 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.