Correlation Between Pacific Premier and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Pacific Premier and Parke Bancorp 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 Pacific Premier and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Premier Bancorp and Parke Bancorp, you can compare the effects of market volatilities on Pacific Premier and Parke Bancorp 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 Pacific Premier with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Premier and Parke Bancorp.
Diversification Opportunities for Pacific Premier and Parke Bancorp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacific and Parke is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Premier Bancorp and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Pacific Premier 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 Pacific Premier Bancorp are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Pacific Premier i.e., Pacific Premier and Parke Bancorp go up and down completely randomly.
Pair Corralation between Pacific Premier and Parke Bancorp
Given the investment horizon of 90 days Pacific Premier is expected to generate 2.72 times less return on investment than Parke Bancorp. In addition to that, Pacific Premier is 1.22 times more volatile than Parke Bancorp. It trades about 0.01 of its total potential returns per unit of risk. Parke Bancorp is currently generating about 0.02 per unit of volatility. If you would invest 1,880 in Parke Bancorp on November 9, 2024 and sell it today you would earn a total of 132.00 from holding Parke Bancorp or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Premier Bancorp vs. Parke Bancorp
Performance |
| Timeline |
| Pacific Premier Bancorp |
| Parke Bancorp |
Pacific Premier and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Premier and Parke Bancorp
The main advantage of trading using opposite Pacific Premier and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Premier position performs unexpectedly, Parke Bancorp 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 Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Pacific Premier vs. Community West Bancshares | Pacific Premier vs. Heritage Financial | Pacific Premier vs. First Financial Northwest | Pacific Premier vs. Sierra Bancorp |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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