Correlation Between TriCo Bancshares and United Security
Can any of the company-specific risk be diversified away by investing in both TriCo Bancshares and United Security 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 TriCo Bancshares and United Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriCo Bancshares and United Security Bancshares, you can compare the effects of market volatilities on TriCo Bancshares and United Security 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 TriCo Bancshares with a short position of United Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriCo Bancshares and United Security.
Diversification Opportunities for TriCo Bancshares and United Security
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TriCo and United is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and United Security Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Security Banc and TriCo Bancshares 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 TriCo Bancshares are associated (or correlated) with United Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Security Banc has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and United Security go up and down completely randomly.
Pair Corralation between TriCo Bancshares and United Security
Given the investment horizon of 90 days TriCo Bancshares is expected to generate 0.96 times more return on investment than United Security. However, TriCo Bancshares is 1.04 times less risky than United Security. It trades about 0.06 of its potential returns per unit of risk. United Security Bancshares is currently generating about -0.08 per unit of risk. If you would invest 4,325 in TriCo Bancshares on November 4, 2024 and sell it today you would earn a total of 62.00 from holding TriCo Bancshares or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TriCo Bancshares vs. United Security Bancshares
Performance |
| Timeline |
| TriCo Bancshares |
| United Security Banc |
TriCo Bancshares and United Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriCo Bancshares and United Security
The main advantage of trading using opposite TriCo Bancshares and United Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriCo Bancshares position performs unexpectedly, United Security 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 Security will offset losses from the drop in United Security's long position.| TriCo Bancshares vs. First Northwest Bancorp | TriCo Bancshares vs. Community West Bancshares | TriCo Bancshares vs. First Financial Northwest | TriCo Bancshares vs. Great Southern Bancorp |
| United Security vs. Home Federal Bancorp | United Security vs. Lake Shore Bancorp | United Security vs. Community West Bancshares | United Security vs. First Northwest 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 Positions Ratings module to 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.
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