Correlation Between Luther Burbank and Home BancShares
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and Home BancShares 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 BancShares 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 BancShares, you can compare the effects of market volatilities on Luther Burbank and Home BancShares 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 BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Home BancShares.
Diversification Opportunities for Luther Burbank and Home BancShares
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luther and Home is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Home BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home BancShares 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 BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home BancShares has no effect on the direction of Luther Burbank i.e., Luther Burbank and Home BancShares go up and down completely randomly.
Pair Corralation between Luther Burbank and Home BancShares
If you would invest 2,749 in Home BancShares on August 31, 2024 and sell it today you would earn a total of 427.00 from holding Home BancShares or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Luther Burbank vs. Home BancShares
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Home BancShares |
Luther Burbank and Home BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Home BancShares
The main advantage of trading using opposite Luther Burbank and Home BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, Home BancShares 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 BancShares will offset losses from the drop in Home BancShares' 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 BancShares vs. Community West Bancshares | Home BancShares vs. First Financial Northwest | Home BancShares vs. First Northwest Bancorp | Home BancShares 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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