Correlation Between Banc Of and First Citizens
Can any of the company-specific risk be diversified away by investing in both Banc Of and First Citizens 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 Banc Of and First Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banc of California and First Citizens BancShares, you can compare the effects of market volatilities on Banc Of and First Citizens 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 Banc Of with a short position of First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banc Of and First Citizens.
Diversification Opportunities for Banc Of and First Citizens
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banc and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Banc of California and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares and Banc Of 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 Banc of California are associated (or correlated) with First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Banc Of i.e., Banc Of and First Citizens go up and down completely randomly.
Pair Corralation between Banc Of and First Citizens
Assuming the 90 days trading horizon Banc of California is expected to generate 0.41 times more return on investment than First Citizens. However, Banc of California is 2.43 times less risky than First Citizens. It trades about 0.19 of its potential returns per unit of risk. First Citizens BancShares is currently generating about -0.04 per unit of risk. If you would invest 2,389 in Banc of California on November 2, 2024 and sell it today you would earn a total of 158.00 from holding Banc of California or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banc of California vs. First Citizens BancShares
Performance |
| Timeline |
| Banc of California |
| First Citizens BancShares |
Banc Of and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banc Of and First Citizens
The main advantage of trading using opposite Banc Of and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banc Of position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Banc Of vs. PennantPark Floating Rate | Banc Of vs. AG Mortgage Investment | Banc Of vs. Encore Capital Group | Banc Of vs. Toronto Dominion Bank |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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