Correlation Between US Bancorp and Pacific Premier
Can any of the company-specific risk be diversified away by investing in both US Bancorp and Pacific Premier 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 US Bancorp and Pacific Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Pacific Premier Bancorp, you can compare the effects of market volatilities on US Bancorp and Pacific Premier 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 US Bancorp with a short position of Pacific Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Pacific Premier.
Diversification Opportunities for US Bancorp and Pacific Premier
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USB and Pacific is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp and Pacific Premier Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Premier Bancorp and US 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 US Bancorp are associated (or correlated) with Pacific Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Premier Bancorp has no effect on the direction of US Bancorp i.e., US Bancorp and Pacific Premier go up and down completely randomly.
Pair Corralation between US Bancorp and Pacific Premier
Considering the 90-day investment horizon US Bancorp is expected to under-perform the Pacific Premier. But the stock apears to be less risky and, when comparing its historical volatility, US Bancorp is 1.55 times less risky than Pacific Premier. The stock trades about -0.36 of its potential returns per unit of risk. The Pacific Premier Bancorp is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 2,541 in Pacific Premier Bancorp on November 28, 2024 and sell it today you would lose (160.00) from holding Pacific Premier Bancorp or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Pacific Premier Bancorp
Performance |
| Timeline |
| US Bancorp |
| Pacific Premier Bancorp |
US Bancorp and Pacific Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Pacific Premier
The main advantage of trading using opposite US Bancorp and Pacific Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp position performs unexpectedly, Pacific Premier 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 Pacific Premier will offset losses from the drop in Pacific Premier's long position.| US Bancorp vs. PNC Financial Services | US Bancorp vs. KeyCorp | US Bancorp vs. Zions Bancorporation | US Bancorp vs. Fifth Third Bancorp |
| Pacific Premier vs. Community West Bancshares | Pacific Premier vs. Heritage Financial | Pacific Premier vs. First Financial Northwest | Pacific Premier vs. Sierra 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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