Correlation Between Texas Capital and Customers Bancorp
Can any of the company-specific risk be diversified away by investing in both Texas Capital and Customers 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 Texas Capital and Customers Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Capital Bancshares and Customers Bancorp, you can compare the effects of market volatilities on Texas Capital and Customers 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 Texas Capital with a short position of Customers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Capital and Customers Bancorp.
Diversification Opportunities for Texas Capital and Customers Bancorp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Texas and Customers is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Texas Capital Bancshares and Customers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Customers Bancorp and Texas Capital 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 Texas Capital Bancshares are associated (or correlated) with Customers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Customers Bancorp has no effect on the direction of Texas Capital i.e., Texas Capital and Customers Bancorp go up and down completely randomly.
Pair Corralation between Texas Capital and Customers Bancorp
Assuming the 90 days horizon Texas Capital Bancshares is expected to generate 0.79 times more return on investment than Customers Bancorp. However, Texas Capital Bancshares is 1.26 times less risky than Customers Bancorp. It trades about -0.1 of its potential returns per unit of risk. Customers Bancorp is currently generating about -0.19 per unit of risk. If you would invest 2,068 in Texas Capital Bancshares on September 13, 2024 and sell it today you would lose (56.00) from holding Texas Capital Bancshares or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Capital Bancshares vs. Customers Bancorp
Performance |
| Timeline |
| Texas Capital Bancshares |
| Customers Bancorp |
Texas Capital and Customers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Capital and Customers Bancorp
The main advantage of trading using opposite Texas Capital and Customers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Capital position performs unexpectedly, Customers 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 Customers Bancorp will offset losses from the drop in Customers Bancorp's long position.| Texas Capital vs. Capital One Financial | Texas Capital vs. Capital One Financial | Texas Capital vs. Bank of America |
| Customers Bancorp vs. Glacier Bancorp | Customers Bancorp vs. Capitol Federal Financial | Customers Bancorp vs. Byline Bancorp | Customers Bancorp vs. Cathay General 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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