Correlation Between Midland States and PacWest Bancorp
Can any of the company-specific risk be diversified away by investing in both Midland States and PacWest 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 Midland States and PacWest Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Midland States Bancorp and PacWest Bancorp, you can compare the effects of market volatilities on Midland States and PacWest 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 Midland States with a short position of PacWest Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Midland States and PacWest Bancorp.
Diversification Opportunities for Midland States and PacWest Bancorp
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Midland and PacWest is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Midland States Bancorp and PacWest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacWest Bancorp and Midland States 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 Midland States Bancorp are associated (or correlated) with PacWest Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacWest Bancorp has no effect on the direction of Midland States i.e., Midland States and PacWest Bancorp go up and down completely randomly.
Pair Corralation between Midland States and PacWest Bancorp
If you would invest 2,530 in Midland States Bancorp on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Midland States Bancorp or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Midland States Bancorp vs. PacWest Bancorp
Performance |
| Timeline |
| Midland States Bancorp |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Midland States and PacWest Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Midland States and PacWest Bancorp
The main advantage of trading using opposite Midland States and PacWest Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Midland States position performs unexpectedly, PacWest 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 PacWest Bancorp will offset losses from the drop in PacWest Bancorp's long position.| Midland States vs. Texas Capital Bancshares | Midland States vs. Merchants Bancorp | Midland States vs. Wintrust Financial Corp |
| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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