Correlation Between Total Stock and Howard Bancorp

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

Diversification Opportunities for Total Stock and Howard Bancorp

-0.78
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Total and Howard is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Total Stock Market and Howard Bancorp Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Howard Bancorp and Total Stock 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 Total Stock Market are associated (or correlated) with Howard Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howard Bancorp has no effect on the direction of Total Stock i.e., Total Stock and Howard Bancorp go up and down completely randomly.

Pair Corralation between Total Stock and Howard Bancorp

Considering the 90-day investment horizon Total Stock is expected to generate 3.91 times less return on investment than Howard Bancorp. But when comparing it to its historical volatility, Total Stock Market is 2.58 times less risky than Howard Bancorp. It trades about 0.05 of its potential returns per unit of risk. Howard Bancorp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,031  in Howard Bancorp on February 18, 2022 and sell it today you would earn a total of  1,299  from holding Howard Bancorp or generate 125.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy83.97%
ValuesDaily Returns

Total Stock Market  vs.  Howard Bancorp Inc

 Performance (%) 
      Timeline 
Total Stock Market 
Total Performance
0 of 100
Over the last 90 days Total Stock Market has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Total Price Channel

Howard Bancorp 
Howard Performance
0 of 100
Over the last 90 days Howard Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Howard Bancorp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Total Stock and Howard Bancorp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Total Stock and Howard Bancorp

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

Total Stock Market

Pair trading matchups for Total Stock

The idea behind Total Stock Market and Howard 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.

Howard Bancorp

Pair trading matchups for Howard Bancorp

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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