Correlation Between PacWest Bancorp and Mid Southern
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp and Mid Southern 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 PacWest Bancorp and Mid Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and Mid Southern Bancorp, you can compare the effects of market volatilities on PacWest Bancorp and Mid Southern 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 PacWest Bancorp with a short position of Mid Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and Mid Southern.
Diversification Opportunities for PacWest Bancorp and Mid Southern
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PacWest and Mid is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and Mid Southern Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Southern Bancorp and PacWest 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 PacWest Bancorp are associated (or correlated) with Mid Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Southern Bancorp has no effect on the direction of PacWest Bancorp i.e., PacWest Bancorp and Mid Southern go up and down completely randomly.
Pair Corralation between PacWest Bancorp and Mid Southern
Given the investment horizon of 90 days PacWest Bancorp is expected to generate 1.37 times more return on investment than Mid Southern. However, PacWest Bancorp is 1.37 times more volatile than Mid Southern Bancorp. It trades about 0.18 of its potential returns per unit of risk. Mid Southern Bancorp is currently generating about 0.22 per unit of risk. If you would invest 853.00 in PacWest Bancorp on September 1, 2024 and sell it today you would earn a total of 201.00 from holding PacWest Bancorp or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
PacWest Bancorp vs. Mid Southern Bancorp
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mid Southern Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PacWest Bancorp and Mid Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and Mid Southern
The main advantage of trading using opposite PacWest Bancorp and Mid Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp position performs unexpectedly, Mid Southern 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 Mid Southern will offset losses from the drop in Mid Southern's long position.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| Mid Southern vs. Community West Bancshares | Mid Southern vs. First Financial Northwest | Mid Southern vs. CF Bankshares | Mid Southern vs. Home Federal 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |