Correlation Between Oconee Financial and Community West
Can any of the company-specific risk be diversified away by investing in both Oconee Financial and Community West 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 Oconee Financial and Community West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Financial and Community West Bancshares, you can compare the effects of market volatilities on Oconee Financial and Community West 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 Oconee Financial with a short position of Community West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Financial and Community West.
Diversification Opportunities for Oconee Financial and Community West
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oconee and Community is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Financial and Community West Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community West Bancshares and Oconee 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 Oconee Financial are associated (or correlated) with Community West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community West Bancshares has no effect on the direction of Oconee Financial i.e., Oconee Financial and Community West go up and down completely randomly.
Pair Corralation between Oconee Financial and Community West
Given the investment horizon of 90 days Oconee Financial is expected to generate 1.93 times less return on investment than Community West. But when comparing it to its historical volatility, Oconee Financial is 2.88 times less risky than Community West. It trades about 0.12 of its potential returns per unit of risk. Community West Bancshares is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,437 in Community West Bancshares on September 3, 2024 and sell it today you would earn a total of 771.00 from holding Community West Bancshares or generate 53.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Oconee Financial vs. Community West Bancshares
Performance |
| Timeline |
| Oconee Financial |
| Community West Bancshares |
Oconee Financial and Community West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Financial and Community West
The main advantage of trading using opposite Oconee Financial and Community West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Financial position performs unexpectedly, Community West 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 Community West will offset losses from the drop in Community West's long position.| Oconee Financial vs. First Hawaiian | Oconee Financial vs. Central Pacific Financial | Oconee Financial vs. Territorial Bancorp | Oconee Financial vs. Comerica |
| Community West vs. JPMorgan Chase Co | Community West vs. Citigroup | Community West vs. Wells Fargo | Community West vs. Toronto Dominion Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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