Correlation Between Territorial Bancorp and CIB Marine
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp and CIB Marine 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 CIB Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and CIB Marine Bancshares, you can compare the effects of market volatilities on Territorial Bancorp and CIB Marine 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 CIB Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and CIB Marine.
Diversification Opportunities for Territorial Bancorp and CIB Marine
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Territorial and CIB is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp and CIB Marine Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIB Marine Bancshares 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 CIB Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIB Marine Bancshares has no effect on the direction of Territorial Bancorp i.e., Territorial Bancorp and CIB Marine go up and down completely randomly.
Pair Corralation between Territorial Bancorp and CIB Marine
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 1.68 times more return on investment than CIB Marine. However, Territorial Bancorp is 1.68 times more volatile than CIB Marine Bancshares. It trades about 0.14 of its potential returns per unit of risk. CIB Marine Bancshares is currently generating about 0.01 per unit of risk. If you would invest 1,008 in Territorial Bancorp on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Territorial Bancorp or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Territorial Bancorp vs. CIB Marine Bancshares
Performance |
| Timeline |
| Territorial Bancorp |
| CIB Marine Bancshares |
Territorial Bancorp and CIB Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and CIB Marine
The main advantage of trading using opposite Territorial Bancorp and CIB Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp position performs unexpectedly, CIB Marine 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 CIB Marine will offset losses from the drop in CIB Marine's long position.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| CIB Marine vs. First Hawaiian | CIB Marine vs. Central Pacific Financial | CIB Marine vs. Territorial Bancorp | CIB Marine vs. Comerica |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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