Correlation Between OFG Bancorp and Luther Burbank
Can any of the company-specific risk be diversified away by investing in both OFG Bancorp 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 OFG Bancorp and Luther Burbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFG Bancorp and Luther Burbank, you can compare the effects of market volatilities on OFG Bancorp 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 OFG Bancorp with a short position of Luther Burbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFG Bancorp and Luther Burbank.
Diversification Opportunities for OFG Bancorp and Luther Burbank
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between OFG and Luther is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding OFG Bancorp and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank 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 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 OFG Bancorp i.e., OFG Bancorp and Luther Burbank go up and down completely randomly.
Pair Corralation between OFG Bancorp and Luther Burbank
If you would invest 3,615 in OFG Bancorp on August 25, 2024 and sell it today you would earn a total of 937.00 from holding OFG Bancorp or generate 25.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
OFG Bancorp vs. Luther Burbank
Performance |
| Timeline |
| OFG Bancorp |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
OFG Bancorp and Luther Burbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFG Bancorp and Luther Burbank
The main advantage of trading using opposite OFG Bancorp and Luther Burbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFG Bancorp 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.| OFG Bancorp vs. Popular | OFG Bancorp vs. The First Bancshares, | OFG Bancorp vs. First Commonwealth Financial | OFG Bancorp vs. First Bancorp |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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