Correlation Between Southern California and Century Financial
Can any of the company-specific risk be diversified away by investing in both Southern California and Century Financial 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 Southern California and Century Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern California Bancorp and Century Financial Corp, you can compare the effects of market volatilities on Southern California and Century Financial 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 Southern California with a short position of Century Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern California and Century Financial.
Diversification Opportunities for Southern California and Century Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Southern and Century is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Southern California Bancorp and Century Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Financial Corp and Southern California 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 Southern California Bancorp are associated (or correlated) with Century Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Financial Corp has no effect on the direction of Southern California i.e., Southern California and Century Financial go up and down completely randomly.
Pair Corralation between Southern California and Century Financial
Given the investment horizon of 90 days Southern California Bancorp is expected to generate 1.14 times more return on investment than Century Financial. However, Southern California is 1.14 times more volatile than Century Financial Corp. It trades about 0.42 of its potential returns per unit of risk. Century Financial Corp is currently generating about 0.24 per unit of risk. If you would invest 1,454 in Southern California Bancorp on September 3, 2024 and sell it today you would earn a total of 338.00 from holding Southern California Bancorp or generate 23.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern California Bancorp vs. Century Financial Corp
Performance |
| Timeline |
| Southern California |
| Century Financial Corp |
Southern California and Century Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern California and Century Financial
The main advantage of trading using opposite Southern California and Century Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern California position performs unexpectedly, Century Financial 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 Century Financial will offset losses from the drop in Century Financial's long position.| Southern California vs. Avidbank Holdings | Southern California vs. American Riviera Bank | Southern California vs. American Business Bk | Southern California vs. Private Bancorp of |
| Century Financial vs. Eastern Michigan Financial | Century Financial vs. Grand River Commerce | Century Financial vs. Bank of Botetourt | Century Financial vs. FNB Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |