Correlation Between United Overseas and PacWest Bancorp
Can any of the company-specific risk be diversified away by investing in both United Overseas and PacWest 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 United Overseas and PacWest Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and PacWest Bancorp, you can compare the effects of market volatilities on United Overseas and PacWest 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 United Overseas with a short position of PacWest Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and PacWest Bancorp.
Diversification Opportunities for United Overseas and PacWest Bancorp
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and PacWest is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank and PacWest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacWest Bancorp and United Overseas 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 United Overseas Bank are associated (or correlated) with PacWest Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacWest Bancorp has no effect on the direction of United Overseas i.e., United Overseas and PacWest Bancorp go up and down completely randomly.
Pair Corralation between United Overseas and PacWest Bancorp
If you would invest 4,386 in United Overseas Bank on August 26, 2024 and sell it today you would earn a total of 1,015 from holding United Overseas Bank or generate 23.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
United Overseas Bank vs. PacWest Bancorp
Performance |
| Timeline |
| United Overseas Bank |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Overseas and PacWest Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Overseas and PacWest Bancorp
The main advantage of trading using opposite United Overseas and PacWest Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas position performs unexpectedly, PacWest 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 PacWest Bancorp will offset losses from the drop in PacWest Bancorp's long position.| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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