Correlation Between Luther Burbank and Orange County
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and Orange County 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 Orange County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and Orange County Bancorp, you can compare the effects of market volatilities on Luther Burbank and Orange County 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 Orange County. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Orange County.
Diversification Opportunities for Luther Burbank and Orange County
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luther and Orange is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Orange County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange County 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 Orange County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange County Bancorp has no effect on the direction of Luther Burbank i.e., Luther Burbank and Orange County go up and down completely randomly.
Pair Corralation between Luther Burbank and Orange County
If you would invest 5,292 in Orange County Bancorp on September 1, 2024 and sell it today you would earn a total of 672.00 from holding Orange County Bancorp or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Luther Burbank vs. Orange County Bancorp
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Orange County Bancorp |
Luther Burbank and Orange County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Orange County
The main advantage of trading using opposite Luther Burbank and Orange County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, Orange County 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 Orange County will offset losses from the drop in Orange County'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 |
| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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