Correlation Between BOC Hong and TriCo Bancshares
Can any of the company-specific risk be diversified away by investing in both BOC Hong and TriCo Bancshares 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 BOC Hong and TriCo Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and TriCo Bancshares, you can compare the effects of market volatilities on BOC Hong and TriCo Bancshares 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 BOC Hong with a short position of TriCo Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and TriCo Bancshares.
Diversification Opportunities for BOC Hong and TriCo Bancshares
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BOC and TriCo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong and TriCo Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriCo Bancshares and BOC Hong 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 BOC Hong Kong are associated (or correlated) with TriCo Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriCo Bancshares has no effect on the direction of BOC Hong i.e., BOC Hong and TriCo Bancshares go up and down completely randomly.
Pair Corralation between BOC Hong and TriCo Bancshares
Assuming the 90 days horizon BOC Hong Kong is expected to generate 0.95 times more return on investment than TriCo Bancshares. However, BOC Hong Kong is 1.05 times less risky than TriCo Bancshares. It trades about 0.12 of its potential returns per unit of risk. TriCo Bancshares is currently generating about 0.06 per unit of risk. If you would invest 6,340 in BOC Hong Kong on November 4, 2024 and sell it today you would earn a total of 205.00 from holding BOC Hong Kong or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOC Hong Kong vs. TriCo Bancshares
Performance |
| Timeline |
| BOC Hong Kong |
| TriCo Bancshares |
BOC Hong and TriCo Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and TriCo Bancshares
The main advantage of trading using opposite BOC Hong and TriCo Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong position performs unexpectedly, TriCo Bancshares 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 TriCo Bancshares will offset losses from the drop in TriCo Bancshares' long position.| BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
| TriCo Bancshares vs. First Northwest Bancorp | TriCo Bancshares vs. Community West Bancshares | TriCo Bancshares vs. First Financial Northwest | TriCo Bancshares vs. Great Southern 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 the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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