Correlation Between Pacific Premier and United Bankshares
Can any of the company-specific risk be diversified away by investing in both Pacific Premier and United Bankshares 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 United Bankshares 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 United Bankshares, you can compare the effects of market volatilities on Pacific Premier and United Bankshares 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 United Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Premier and United Bankshares.
Diversification Opportunities for Pacific Premier and United Bankshares
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacific and United is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Premier Bancorp and United Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankshares 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 United Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankshares has no effect on the direction of Pacific Premier i.e., Pacific Premier and United Bankshares go up and down completely randomly.
Pair Corralation between Pacific Premier and United Bankshares
Given the investment horizon of 90 days Pacific Premier is expected to generate 3.57 times less return on investment than United Bankshares. In addition to that, Pacific Premier is 1.29 times more volatile than United Bankshares. It trades about 0.0 of its total potential returns per unit of risk. United Bankshares is currently generating about 0.02 per unit of volatility. If you would invest 3,789 in United Bankshares on August 24, 2024 and sell it today you would earn a total of 385.00 from holding United Bankshares or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pacific Premier Bancorp vs. United Bankshares
Performance |
| Timeline |
| Pacific Premier Bancorp |
| United Bankshares |
Pacific Premier and United Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Premier and United Bankshares
The main advantage of trading using opposite Pacific Premier and United Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Premier position performs unexpectedly, United Bankshares 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 Bankshares will offset losses from the drop in United Bankshares' long position.| Pacific Premier vs. Community West Bancshares | Pacific Premier vs. Heritage Financial | Pacific Premier vs. First Financial Northwest | Pacific Premier vs. Sierra Bancorp |
| United Bankshares vs. Peoples Bancorp | United Bankshares vs. Eagle Bancorp | United Bankshares vs. Northrim BanCorp | United Bankshares vs. Pacific Premier 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |