Correlation Between Equity Bancshares, and Hope Bancorp
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and Hope 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 Equity Bancshares, and Hope Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and Hope Bancorp, you can compare the effects of market volatilities on Equity Bancshares, and Hope 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 Equity Bancshares, with a short position of Hope Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Hope Bancorp.
Diversification Opportunities for Equity Bancshares, and Hope Bancorp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and Hope is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Hope Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hope Bancorp and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Hope Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hope Bancorp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Hope Bancorp go up and down completely randomly.
Pair Corralation between Equity Bancshares, and Hope Bancorp
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.91 times more return on investment than Hope Bancorp. However, Equity Bancshares, is 1.1 times less risky than Hope Bancorp. It trades about 0.04 of its potential returns per unit of risk. Hope Bancorp is currently generating about 0.02 per unit of risk. If you would invest 3,395 in Equity Bancshares, on September 3, 2024 and sell it today you would earn a total of 1,404 from holding Equity Bancshares, or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. Hope Bancorp
Performance |
| Timeline |
| Equity Bancshares, |
| Hope Bancorp |
Equity Bancshares, and Hope Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and Hope Bancorp
The main advantage of trading using opposite Equity Bancshares, and Hope Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, Hope 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 Hope Bancorp will offset losses from the drop in Hope Bancorp's long position.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| Hope Bancorp vs. OP Bancorp | Hope Bancorp vs. PCB Bancorp | Hope Bancorp vs. Financial Institutions | Hope Bancorp vs. LINKBANCORP |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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