Correlation Between National Bankshares and Security National
Can any of the company-specific risk be diversified away by investing in both National Bankshares and Security National 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 National Bankshares and Security National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bankshares and Security National Financial, you can compare the effects of market volatilities on National Bankshares and Security National 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 National Bankshares with a short position of Security National. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bankshares and Security National.
Diversification Opportunities for National Bankshares and Security National
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Security is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding National Bankshares and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and National Bankshares 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 National Bankshares are associated (or correlated) with Security National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security National has no effect on the direction of National Bankshares i.e., National Bankshares and Security National go up and down completely randomly.
Pair Corralation between National Bankshares and Security National
Given the investment horizon of 90 days National Bankshares is expected to generate 0.96 times more return on investment than Security National. However, National Bankshares is 1.04 times less risky than Security National. It trades about 0.04 of its potential returns per unit of risk. Security National Financial is currently generating about -0.01 per unit of risk. If you would invest 2,870 in National Bankshares on August 18, 2025 and sell it today you would earn a total of 127.00 from holding National Bankshares or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bankshares vs. Security National Financial
Performance |
| Timeline |
| National Bankshares |
| Security National |
National Bankshares and Security National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bankshares and Security National
The main advantage of trading using opposite National Bankshares and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bankshares position performs unexpectedly, Security National 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 Security National will offset losses from the drop in Security National's long position.| National Bankshares vs. Eagle Financial Services | National Bankshares vs. Ames National | National Bankshares vs. Mainstreet Bank | National Bankshares vs. Chain Bridge Bancorp, |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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