Correlation Between Luther Burbank and First Business
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and First Business 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 Luther Burbank and First Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and First Business Financial, you can compare the effects of market volatilities on Luther Burbank and First Business 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 Luther Burbank with a short position of First Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and First Business.
Diversification Opportunities for Luther Burbank and First Business
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luther and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and First Business Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Business Financial and Luther Burbank 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 Luther Burbank are associated (or correlated) with First Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Business Financial has no effect on the direction of Luther Burbank i.e., Luther Burbank and First Business go up and down completely randomly.
Pair Corralation between Luther Burbank and First Business
If you would invest 3,259 in First Business Financial on November 3, 2024 and sell it today you would earn a total of 1,907 from holding First Business Financial or generate 58.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Luther Burbank vs. First Business Financial
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Business Financial |
Luther Burbank and First Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and First Business
The main advantage of trading using opposite Luther Burbank and First Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, First Business 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 First Business will offset losses from the drop in First Business' long position.| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest Bancorp |
| First Business vs. US Bancorp | First Business vs. Truist Financial Corp | First Business vs. Fifth Third Bancorp | First Business vs. KeyCorp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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