Correlation Between Sierra Bancorp and FNCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Sierra Bancorp and FNCB 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 Sierra Bancorp and FNCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Bancorp and FNCB Bancorp, you can compare the effects of market volatilities on Sierra Bancorp and FNCB 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 Sierra Bancorp with a short position of FNCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Bancorp and FNCB Bancorp.
Diversification Opportunities for Sierra Bancorp and FNCB Bancorp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sierra and FNCB is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Bancorp and FNCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNCB Bancorp and Sierra Bancorp 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 Sierra Bancorp are associated (or correlated) with FNCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNCB Bancorp has no effect on the direction of Sierra Bancorp i.e., Sierra Bancorp and FNCB Bancorp go up and down completely randomly.
Pair Corralation between Sierra Bancorp and FNCB Bancorp
If you would invest 2,915 in Sierra Bancorp on August 28, 2024 and sell it today you would earn a total of 323.00 from holding Sierra Bancorp or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Sierra Bancorp vs. FNCB Bancorp
Performance |
| Timeline |
| Sierra Bancorp |
| FNCB Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sierra Bancorp and FNCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Bancorp and FNCB Bancorp
The main advantage of trading using opposite Sierra Bancorp and FNCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Bancorp position performs unexpectedly, FNCB 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 FNCB Bancorp will offset losses from the drop in FNCB Bancorp's long position.| Sierra Bancorp vs. Fifth Third Bancorp | Sierra Bancorp vs. Huntington Bancshares Incorporated | Sierra Bancorp vs. Comerica | Sierra Bancorp vs. MT 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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