Correlation Between First Business and Luther Burbank
Can any of the company-specific risk be diversified away by investing in both First Business and Luther Burbank 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 First Business and Luther Burbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Business Financial and Luther Burbank, you can compare the effects of market volatilities on First Business and Luther Burbank 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 First Business with a short position of Luther Burbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Business and Luther Burbank.
Diversification Opportunities for First Business and Luther Burbank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Luther is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Business Financial and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank and First Business 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 First Business Financial are associated (or correlated) with Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of First Business i.e., First Business and Luther Burbank go up and down completely randomly.
Pair Corralation between First Business and Luther Burbank
If you would invest 4,503 in First Business Financial on November 3, 2024 and sell it today you would earn a total of 663.00 from holding First Business Financial or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
First Business Financial vs. Luther Burbank
Performance |
| Timeline |
| First Business Financial |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Business and Luther Burbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Business and Luther Burbank
The main advantage of trading using opposite First Business and Luther Burbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Business position performs unexpectedly, Luther Burbank 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 Luther Burbank will offset losses from the drop in Luther Burbank's long position.| First Business vs. US Bancorp | First Business vs. Truist Financial Corp | First Business vs. Fifth Third Bancorp | First Business vs. KeyCorp |
| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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