Correlation Between Village Bank and Madison County

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Can any of the company-specific risk be diversified away by investing in both Village Bank and Madison County 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 Village Bank and Madison County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Bank And and Madison County Financial, you can compare the effects of market volatilities on Village Bank and Madison County 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 Village Bank with a short position of Madison County. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Bank and Madison County.

Diversification Opportunities for Village Bank and Madison County

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Village and Madison is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Village Bank And and Madison County Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison County Financial and Village Bank 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 Village Bank And are associated (or correlated) with Madison County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison County Financial has no effect on the direction of Village Bank i.e., Village Bank and Madison County go up and down completely randomly.

Pair Corralation between Village Bank and Madison County

If you would invest  4,231  in Village Bank And on December 29, 2023 and sell it today you would earn a total of  19.00  from holding Village Bank And or generate 0.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy3.33%
ValuesDaily Returns

Village Bank And  vs.  Madison County Financial

 Performance 
       Timeline  
Village Bank And 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Village Bank And are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Village Bank may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Madison County Financial 

Risk-Adjusted Performance

0 of 100

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

Village Bank and Madison County Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Village Bank and Madison County

The main advantage of trading using opposite Village Bank and Madison County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Bank position performs unexpectedly, Madison County 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 Madison County will offset losses from the drop in Madison County's long position.
The idea behind Village Bank And and Madison County Financial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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