Correlation Between PacWest Bancorp and United Overseas
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp and United Overseas 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 United Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and United Overseas Bank, you can compare the effects of market volatilities on PacWest Bancorp and United Overseas 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 United Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and United Overseas.
Diversification Opportunities for PacWest Bancorp and United Overseas
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PacWest and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp and United Overseas Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Overseas Bank 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 United Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Overseas Bank has no effect on the direction of PacWest Bancorp i.e., PacWest Bancorp and United Overseas go up and down completely randomly.
Pair Corralation between PacWest Bancorp and United Overseas
If you would invest 3,964 in United Overseas Bank on November 19, 2024 and sell it today you would earn a total of 1,725 from holding United Overseas Bank or generate 43.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
PacWest Bancorp vs. United Overseas Bank
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| United Overseas Bank |
PacWest Bancorp and United Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and United Overseas
The main advantage of trading using opposite PacWest Bancorp and United Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp position performs unexpectedly, United Overseas 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 United Overseas will offset losses from the drop in United Overseas' long position.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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