Correlation Between OFG Bancorp and Popular
Can any of the company-specific risk be diversified away by investing in both OFG Bancorp and Popular 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 OFG Bancorp and Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFG Bancorp and Popular, you can compare the effects of market volatilities on OFG Bancorp and Popular 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 OFG Bancorp with a short position of Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFG Bancorp and Popular.
Diversification Opportunities for OFG Bancorp and Popular
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OFG and Popular is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding OFG Bancorp and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and OFG Bancorp 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 OFG Bancorp are associated (or correlated) with Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of OFG Bancorp i.e., OFG Bancorp and Popular go up and down completely randomly.
Pair Corralation between OFG Bancorp and Popular
Considering the 90-day investment horizon OFG Bancorp is expected to generate 1.19 times more return on investment than Popular. However, OFG Bancorp is 1.19 times more volatile than Popular. It trades about 0.21 of its potential returns per unit of risk. Popular is currently generating about 0.17 per unit of risk. If you would invest 3,955 in OFG Bancorp on August 24, 2024 and sell it today you would earn a total of 597.00 from holding OFG Bancorp or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFG Bancorp vs. Popular
Performance |
| Timeline |
| OFG Bancorp |
| Popular |
OFG Bancorp and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFG Bancorp and Popular
The main advantage of trading using opposite OFG Bancorp and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFG Bancorp position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| OFG Bancorp vs. Popular | OFG Bancorp vs. The First Bancshares, | OFG Bancorp vs. First Commonwealth Financial | OFG Bancorp vs. First Bancorp |
| Popular vs. OFG Bancorp | Popular vs. The First Bancshares, | Popular vs. First Commonwealth Financial | Popular vs. First 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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