Correlation Between OceanFirst Financial and Cathay General
Can any of the company-specific risk be diversified away by investing in both OceanFirst Financial and Cathay General 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 OceanFirst Financial and Cathay General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OceanFirst Financial Corp and Cathay General Bancorp, you can compare the effects of market volatilities on OceanFirst Financial and Cathay General 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 OceanFirst Financial with a short position of Cathay General. Check out your portfolio center. Please also check ongoing floating volatility patterns of OceanFirst Financial and Cathay General.
Diversification Opportunities for OceanFirst Financial and Cathay General
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between OceanFirst and Cathay is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding OceanFirst Financial Corp and Cathay General Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay General Bancorp and OceanFirst Financial 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 OceanFirst Financial Corp are associated (or correlated) with Cathay General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay General Bancorp has no effect on the direction of OceanFirst Financial i.e., OceanFirst Financial and Cathay General go up and down completely randomly.
Pair Corralation between OceanFirst Financial and Cathay General
Given the investment horizon of 90 days OceanFirst Financial Corp is expected to generate 1.27 times more return on investment than Cathay General. However, OceanFirst Financial is 1.27 times more volatile than Cathay General Bancorp. It trades about 0.2 of its potential returns per unit of risk. Cathay General Bancorp is currently generating about 0.23 per unit of risk. If you would invest 1,810 in OceanFirst Financial Corp on August 28, 2024 and sell it today you would earn a total of 317.00 from holding OceanFirst Financial Corp or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OceanFirst Financial Corp vs. Cathay General Bancorp
Performance |
| Timeline |
| OceanFirst Financial Corp |
| Cathay General Bancorp |
OceanFirst Financial and Cathay General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OceanFirst Financial and Cathay General
The main advantage of trading using opposite OceanFirst Financial and Cathay General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OceanFirst Financial position performs unexpectedly, Cathay General 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 Cathay General will offset losses from the drop in Cathay General's long position.| OceanFirst Financial vs. Flushing Financial | OceanFirst Financial vs. Dime Community Bancshares | OceanFirst Financial vs. Peapack Gladstone Financial | OceanFirst Financial vs. Heritage Financial |
| Cathay General vs. Fifth Third Bancorp | Cathay General vs. Zions Bancorporation | Cathay General vs. Huntington Bancshares Incorporated | Cathay General vs. Comerica |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |