Correlation Between Territorial Bancorp and FineMark Holdings
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp and FineMark Holdings 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 FineMark Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and FineMark Holdings, you can compare the effects of market volatilities on Territorial Bancorp and FineMark Holdings 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 FineMark Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and FineMark Holdings.
Diversification Opportunities for Territorial Bancorp and FineMark Holdings
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Territorial and FineMark is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp and FineMark Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FineMark Holdings 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 FineMark Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FineMark Holdings has no effect on the direction of Territorial Bancorp i.e., Territorial Bancorp and FineMark Holdings go up and down completely randomly.
Pair Corralation between Territorial Bancorp and FineMark Holdings
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 8.55 times more return on investment than FineMark Holdings. However, Territorial Bancorp is 8.55 times more volatile than FineMark Holdings. It trades about 0.14 of its potential returns per unit of risk. FineMark Holdings is currently generating about 0.18 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 | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Territorial Bancorp vs. FineMark Holdings
Performance |
| Timeline |
| Territorial Bancorp |
| FineMark Holdings |
Territorial Bancorp and FineMark Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and FineMark Holdings
The main advantage of trading using opposite Territorial Bancorp and FineMark Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp position performs unexpectedly, FineMark Holdings 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 FineMark Holdings will offset losses from the drop in FineMark Holdings' long position.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| FineMark Holdings vs. First Hawaiian | FineMark Holdings vs. Central Pacific Financial | FineMark Holdings vs. Territorial Bancorp | FineMark Holdings 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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