Correlation Between International Bancshares and Live Oak
Can any of the company-specific risk be diversified away by investing in both International Bancshares and Live Oak 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 International Bancshares and Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Bancshares and Live Oak Bancshares, you can compare the effects of market volatilities on International Bancshares and Live Oak 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 International Bancshares with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Bancshares and Live Oak.
Diversification Opportunities for International Bancshares and Live Oak
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Live is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding International Bancshares and Live Oak Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Bancshares and International 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 International Bancshares are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Bancshares has no effect on the direction of International Bancshares i.e., International Bancshares and Live Oak go up and down completely randomly.
Pair Corralation between International Bancshares and Live Oak
Given the investment horizon of 90 days International Bancshares is expected to generate 0.76 times more return on investment than Live Oak. However, International Bancshares is 1.32 times less risky than Live Oak. It trades about -0.12 of its potential returns per unit of risk. Live Oak Bancshares is currently generating about -0.19 per unit of risk. If you would invest 7,308 in International Bancshares on September 12, 2024 and sell it today you would lose (258.00) from holding International Bancshares or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Bancshares vs. Live Oak Bancshares
Performance |
| Timeline |
| International Bancshares |
| Live Oak Bancshares |
International Bancshares and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Bancshares and Live Oak
The main advantage of trading using opposite International Bancshares and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bancshares position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| International Bancshares vs. JPMorgan Chase Co | International Bancshares vs. Citigroup | International Bancshares vs. Wells Fargo | International Bancshares vs. Toronto Dominion Bank |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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