Correlation Between Luther Burbank and SB Financial
Can any of the company-specific risk be diversified away by investing in both Luther Burbank and SB 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 SB 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 SB Financial Group, you can compare the effects of market volatilities on Luther Burbank and SB 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 SB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and SB Financial.
Diversification Opportunities for Luther Burbank and SB Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Luther and SBFG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and SB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SB Financial Group 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 SB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SB Financial Group has no effect on the direction of Luther Burbank i.e., Luther Burbank and SB Financial go up and down completely randomly.
Pair Corralation between Luther Burbank and SB Financial
If you would invest 1,954 in SB Financial Group on August 30, 2024 and sell it today you would earn a total of 221.00 from holding SB Financial Group or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Luther Burbank vs. SB Financial Group
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SB Financial Group |
Luther Burbank and SB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and SB Financial
The main advantage of trading using opposite Luther Burbank and SB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank position performs unexpectedly, SB 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 SB Financial will offset losses from the drop in SB 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 |
| SB Financial vs. Home Federal Bancorp | SB Financial vs. Lake Shore Bancorp | SB Financial vs. National Bankshares | SB Financial vs. Sound Financial Bancorp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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