Correlation Between Business First and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both Business First and Sierra 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 Business First and Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Business First Bancshares and Sierra Bancorp, you can compare the effects of market volatilities on Business First and Sierra 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 Business First with a short position of Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Business First and Sierra Bancorp.
Diversification Opportunities for Business First and Sierra Bancorp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Business and Sierra is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Business First Bancshares and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp and Business First 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 Business First Bancshares are associated (or correlated) with Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of Business First i.e., Business First and Sierra Bancorp go up and down completely randomly.
Pair Corralation between Business First and Sierra Bancorp
Given the investment horizon of 90 days Business First Bancshares is expected to generate 0.85 times more return on investment than Sierra Bancorp. However, Business First Bancshares is 1.17 times less risky than Sierra Bancorp. It trades about 0.03 of its potential returns per unit of risk. Sierra Bancorp is currently generating about 0.02 per unit of risk. If you would invest 2,382 in Business First Bancshares on December 5, 2024 and sell it today you would earn a total of 162.00 from holding Business First Bancshares or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Business First Bancshares vs. Sierra Bancorp
Performance |
| Timeline |
| Business First Bancshares |
| Sierra Bancorp |
Business First and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Business First and Sierra Bancorp
The main advantage of trading using opposite Business First and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Business First position performs unexpectedly, Sierra 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| Business First vs. First Community | ||
| Business First vs. Community West Bancshares | ||
| Business First vs. First Financial Northwest | ||
| Business First vs. First Northwest Bancorp |
| Sierra Bancorp vs. Home Federal Bancorp | ||
| Sierra Bancorp vs. First Financial Northwest | ||
| Sierra Bancorp vs. First Northwest Bancorp | ||
| Sierra Bancorp vs. First Capital |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets |