Correlation Between Luther Burbank and First Financial
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and First 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 Luther Burbank and First Financial 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 Financial Northwest, you can compare the effects of market volatilities on Luther Burbank and First 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 Luther Burbank with a short position of First Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and First Financial.
Diversification Opportunities for Luther Burbank and First Financial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luther and First is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and First Financial Northwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Financial Northwest 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Financial Northwest has no effect on the direction of Luther Burbank i.e., Luther Burbank and First Financial go up and down completely randomly.
Pair Corralation between Luther Burbank and First Financial
If you would invest 1,331 in First Financial Northwest on August 25, 2024 and sell it today you would earn a total of 916.00 from holding First Financial Northwest or generate 68.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Luther Burbank vs. First Financial Northwest
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Financial Northwest |
Luther Burbank and First Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and First Financial
The main advantage of trading using opposite Luther Burbank and First Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, First 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 First Financial will offset losses from the drop in First Financial's 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 Financial vs. Fifth Third Bancorp | First Financial vs. Zions Bancorporation | First Financial vs. Huntington Bancshares Incorporated | First Financial vs. PNC Financial Services |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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