Correlation Between Luther Burbank and Home Bancorp
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and Home Bancorp 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 Home Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and Home Bancorp, you can compare the effects of market volatilities on Luther Burbank and Home Bancorp 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 Home Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Home Bancorp.
Diversification Opportunities for Luther Burbank and Home Bancorp
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luther and Home is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Home Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Bancorp 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 Home Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Bancorp has no effect on the direction of Luther Burbank i.e., Luther Burbank and Home Bancorp go up and down completely randomly.
Pair Corralation between Luther Burbank and Home Bancorp
If you would invest 4,821 in Home Bancorp on August 30, 2024 and sell it today you would earn a total of 257.00 from holding Home Bancorp or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Luther Burbank vs. Home Bancorp
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Home Bancorp |
Luther Burbank and Home Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Home Bancorp
The main advantage of trading using opposite Luther Burbank and Home Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, Home Bancorp 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 Home Bancorp will offset losses from the drop in Home Bancorp'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 |
| Home Bancorp vs. Home Federal Bancorp | Home Bancorp vs. Community West Bancshares | Home Bancorp vs. First Financial Northwest | Home Bancorp vs. First Capital |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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