Correlation Between TriCo Bancshares and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both TriCo Bancshares and Zions Bancorporation 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 Zions Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriCo Bancshares and Zions Bancorporation National, you can compare the effects of market volatilities on TriCo Bancshares and Zions Bancorporation 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 Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriCo Bancshares and Zions Bancorporation.
Diversification Opportunities for TriCo Bancshares and Zions Bancorporation
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TriCo and Zions is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and Zions Bancorp. National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and Zions Bancorporation go up and down completely randomly.
Pair Corralation between TriCo Bancshares and Zions Bancorporation
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 | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
TriCo Bancshares vs. Zions Bancorp. National
Performance |
| Timeline |
| TriCo Bancshares |
| Zions Bancorporation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TriCo Bancshares and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriCo Bancshares and Zions Bancorporation
The main advantage of trading using opposite TriCo Bancshares and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriCo Bancshares position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation'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 |
| Zions Bancorporation vs. Zions Bancorporation National | Zions Bancorporation vs. Valley National Bancorp | Zions Bancorporation vs. Valley National Bancorp | Zions Bancorporation vs. Wintrust Financial Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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