Correlation Between Virginia National and Heritage Commerce
Can any of the company-specific risk be diversified away by investing in both Virginia National and Heritage Commerce 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 Heritage Commerce 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 Heritage Commerce Corp, you can compare the effects of market volatilities on Virginia National and Heritage Commerce 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 Heritage Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Heritage Commerce.
Diversification Opportunities for Virginia National and Heritage Commerce
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Heritage is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Heritage Commerce Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Commerce Corp 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 Heritage Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Commerce Corp has no effect on the direction of Virginia National i.e., Virginia National and Heritage Commerce go up and down completely randomly.
Pair Corralation between Virginia National and Heritage Commerce
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 1.32 times more return on investment than Heritage Commerce. However, Virginia National is 1.32 times more volatile than Heritage Commerce Corp. It trades about 0.03 of its potential returns per unit of risk. Heritage Commerce Corp is currently generating about -0.06 per unit of risk. If you would invest 3,733 in Virginia National Bankshares on July 19, 2025 and sell it today you would earn a total of 74.00 from holding Virginia National Bankshares or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Heritage Commerce Corp
Performance |
| Timeline |
| Virginia National |
| Heritage Commerce Corp |
Virginia National and Heritage Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Heritage Commerce
The main advantage of trading using opposite Virginia National and Heritage Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National position performs unexpectedly, Heritage Commerce 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 Heritage Commerce will offset losses from the drop in Heritage Commerce's long position.| Virginia National vs. First Community | Virginia National vs. SB Financial Group | Virginia National vs. FS Bancorp | Virginia National vs. Chemung Financial Corp |
| Heritage Commerce vs. Sierra Bancorp | Heritage Commerce vs. Community West Bancshares | Heritage Commerce vs. Horizon Bancorp | Heritage Commerce vs. Heritage Financial |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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