Correlation Between Hancock Whitney and Central Pacific
Can any of the company-specific risk be diversified away by investing in both Hancock Whitney and Central Pacific 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 Hancock Whitney and Central Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancock Whitney Corp and Central Pacific Financial, you can compare the effects of market volatilities on Hancock Whitney and Central Pacific 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 Hancock Whitney with a short position of Central Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancock Whitney and Central Pacific.
Diversification Opportunities for Hancock Whitney and Central Pacific
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hancock and Central is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hancock Whitney Corp and Central Pacific Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Pacific Financial and Hancock Whitney 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 Hancock Whitney Corp are associated (or correlated) with Central Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Pacific Financial has no effect on the direction of Hancock Whitney i.e., Hancock Whitney and Central Pacific go up and down completely randomly.
Pair Corralation between Hancock Whitney and Central Pacific
Considering the 90-day investment horizon Hancock Whitney is expected to generate 1.37 times less return on investment than Central Pacific. In addition to that, Hancock Whitney is 1.06 times more volatile than Central Pacific Financial. It trades about 0.03 of its total potential returns per unit of risk. Central Pacific Financial is currently generating about 0.04 per unit of volatility. If you would invest 2,095 in Central Pacific Financial on November 7, 2024 and sell it today you would earn a total of 919.00 from holding Central Pacific Financial or generate 43.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancock Whitney Corp vs. Central Pacific Financial
Performance |
| Timeline |
| Hancock Whitney Corp |
| Central Pacific Financial |
Hancock Whitney and Central Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancock Whitney and Central Pacific
The main advantage of trading using opposite Hancock Whitney and Central Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancock Whitney position performs unexpectedly, Central Pacific 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 Central Pacific will offset losses from the drop in Central Pacific's long position.| Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney vs. Great Southern Bancorp |
| Central Pacific vs. Bank of Hawaii | Central Pacific vs. Territorial Bancorp | Central Pacific vs. First Bancorp | Central Pacific vs. Hancock Whitney Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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