Correlation Between Orange County and Luther Burbank
Can any of the company-specific risk be diversified away by investing in both Orange County and Luther Burbank 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 Orange County and Luther Burbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange County Bancorp and Luther Burbank, you can compare the effects of market volatilities on Orange County and Luther Burbank 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 Orange County with a short position of Luther Burbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange County and Luther Burbank.
Diversification Opportunities for Orange County and Luther Burbank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Orange and Luther is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Orange County Bancorp and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank and Orange County 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 Orange County Bancorp are associated (or correlated) with Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of Orange County i.e., Orange County and Luther Burbank go up and down completely randomly.
Pair Corralation between Orange County and Luther Burbank
If you would invest (100.00) in Luther Burbank on November 27, 2024 and sell it today you would earn a total of 100.00 from holding Luther Burbank or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Orange County Bancorp vs. Luther Burbank
Performance |
| Timeline |
| Orange County Bancorp |
| Luther Burbank |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Orange County and Luther Burbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange County and Luther Burbank
The main advantage of trading using opposite Orange County and Luther Burbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange County position performs unexpectedly, Luther Burbank 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 Luther Burbank will offset losses from the drop in Luther Burbank's long position.| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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