Correlation Between East West and BOK Financial
Can any of the company-specific risk be diversified away by investing in both East West and BOK Financial 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 East West and BOK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Bancorp and BOK Financial, you can compare the effects of market volatilities on East West and BOK Financial 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 East West with a short position of BOK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and BOK Financial.
Diversification Opportunities for East West and BOK Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between East and BOK is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding East West Bancorp and BOK Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOK Financial and East West 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 East West Bancorp are associated (or correlated) with BOK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOK Financial has no effect on the direction of East West i.e., East West and BOK Financial go up and down completely randomly.
Pair Corralation between East West and BOK Financial
Given the investment horizon of 90 days East West Bancorp is expected to generate 0.97 times more return on investment than BOK Financial. However, East West Bancorp is 1.03 times less risky than BOK Financial. It trades about 0.2 of its potential returns per unit of risk. BOK Financial is currently generating about 0.19 per unit of risk. If you would invest 9,827 in East West Bancorp on August 31, 2024 and sell it today you would earn a total of 1,178 from holding East West Bancorp or generate 11.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Bancorp vs. BOK Financial
Performance |
| Timeline |
| East West Bancorp |
| BOK Financial |
East West and BOK Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and BOK Financial
The main advantage of trading using opposite East West and BOK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, BOK Financial 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 BOK Financial will offset losses from the drop in BOK Financial's long position.| East West vs. Barclays PLC ADR | East West vs. UBS Group AG | East West vs. ING Group NV | East West vs. Citigroup |
| BOK Financial vs. First Financial Bankshares | BOK Financial vs. Auburn National Bancorporation | BOK Financial vs. Great Southern Bancorp | BOK Financial vs. First Guaranty Bancshares |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |