Correlation Between Sierra Bancorp and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Sierra Bancorp and Univest Pennsylvania 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 Univest Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Bancorp and Univest Pennsylvania, you can compare the effects of market volatilities on Sierra Bancorp and Univest Pennsylvania 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 Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Bancorp and Univest Pennsylvania.
Diversification Opportunities for Sierra Bancorp and Univest Pennsylvania
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sierra and Univest is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Bancorp and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Sierra Bancorp i.e., Sierra Bancorp and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between Sierra Bancorp and Univest Pennsylvania
Given the investment horizon of 90 days Sierra Bancorp is expected to generate 1.06 times more return on investment than Univest Pennsylvania. However, Sierra Bancorp is 1.06 times more volatile than Univest Pennsylvania. It trades about 0.05 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.03 per unit of risk. If you would invest 2,022 in Sierra Bancorp on August 30, 2024 and sell it today you would earn a total of 1,139 from holding Sierra Bancorp or generate 56.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Bancorp vs. Univest Pennsylvania
Performance |
| Timeline |
| Sierra Bancorp |
| Univest Pennsylvania |
Sierra Bancorp and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Bancorp and Univest Pennsylvania
The main advantage of trading using opposite Sierra Bancorp and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Bancorp position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.| Sierra Bancorp vs. Home Federal Bancorp | Sierra Bancorp vs. First Financial Northwest | Sierra Bancorp vs. First Northwest Bancorp | Sierra Bancorp vs. First Capital |
| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |