Correlation Between Territorial Bancorp and Bank of San
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp and Bank of San 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 Territorial Bancorp and Bank of San into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and Bank of San, you can compare the effects of market volatilities on Territorial Bancorp and Bank of San 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 Territorial Bancorp with a short position of Bank of San. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and Bank of San.
Diversification Opportunities for Territorial Bancorp and Bank of San
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Territorial and Bank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp and Bank of San in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of San and Territorial 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 Territorial Bancorp are associated (or correlated) with Bank of San. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of San has no effect on the direction of Territorial Bancorp i.e., Territorial Bancorp and Bank of San go up and down completely randomly.
Pair Corralation between Territorial Bancorp and Bank of San
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 8.37 times less return on investment than Bank of San. In addition to that, Territorial Bancorp is 1.96 times more volatile than Bank of San. It trades about 0.01 of its total potential returns per unit of risk. Bank of San is currently generating about 0.1 per unit of volatility. If you would invest 1,880 in Bank of San on September 4, 2024 and sell it today you would earn a total of 1,135 from holding Bank of San or generate 60.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Territorial Bancorp vs. Bank of San
Performance |
| Timeline |
| Territorial Bancorp |
| Bank of San |
Territorial Bancorp and Bank of San Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and Bank of San
The main advantage of trading using opposite Territorial Bancorp and Bank of San positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp position performs unexpectedly, Bank of San 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 of San will offset losses from the drop in Bank of San's long position.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| Bank of San vs. Pioneer Bankcorp | Bank of San vs. Liberty Northwest Bancorp | Bank of San vs. Summit Bancshares | Bank of San vs. Washington Business Bank |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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