Correlation Between PacWest Bancorp and Bank Ozk
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp and Bank Ozk 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 Bank Ozk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and Bank Ozk Preferred, you can compare the effects of market volatilities on PacWest Bancorp and Bank Ozk 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 Bank Ozk. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and Bank Ozk.
Diversification Opportunities for PacWest Bancorp and Bank Ozk
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PacWest and Bank is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and Bank Ozk Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ozk Preferred 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 Bank Ozk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ozk Preferred has no effect on the direction of PacWest Bancorp i.e., PacWest Bancorp and Bank Ozk go up and down completely randomly.
Pair Corralation between PacWest Bancorp and Bank Ozk
If you would invest 1,054 in PacWest Bancorp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding PacWest Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
PacWest Bancorp vs. Bank Ozk Preferred
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank Ozk Preferred |
PacWest Bancorp and Bank Ozk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and Bank Ozk
The main advantage of trading using opposite PacWest Bancorp and Bank Ozk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp position performs unexpectedly, Bank Ozk 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 Bank Ozk will offset losses from the drop in Bank Ozk's long position.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| Bank Ozk vs. Regions Financial | Bank Ozk vs. Huntington Bancshares Incorporated | Bank Ozk vs. Texas Capital Bancshares | Bank Ozk vs. Washington Federal |
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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