Correlation Between Westamerica Bancorporation and Banc Of
Can any of the company-specific risk be diversified away by investing in both Westamerica Bancorporation and Banc Of 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 Westamerica Bancorporation and Banc Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westamerica Bancorporation and Banc of California,, you can compare the effects of market volatilities on Westamerica Bancorporation and Banc Of 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 Westamerica Bancorporation with a short position of Banc Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westamerica Bancorporation and Banc Of.
Diversification Opportunities for Westamerica Bancorporation and Banc Of
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westamerica and Banc is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Westamerica Bancorp. and Banc of California, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California, and Westamerica Bancorporation 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 Westamerica Bancorporation are associated (or correlated) with Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California, has no effect on the direction of Westamerica Bancorporation i.e., Westamerica Bancorporation and Banc Of go up and down completely randomly.
Pair Corralation between Westamerica Bancorporation and Banc Of
Given the investment horizon of 90 days Westamerica Bancorporation is expected to generate 1.12 times more return on investment than Banc Of. However, Westamerica Bancorporation is 1.12 times more volatile than Banc of California,. It trades about 0.18 of its potential returns per unit of risk. Banc of California, is currently generating about 0.16 per unit of risk. If you would invest 5,146 in Westamerica Bancorporation on August 25, 2024 and sell it today you would earn a total of 614.00 from holding Westamerica Bancorporation or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westamerica Bancorp. vs. Banc of California,
Performance |
| Timeline |
| Westamerica Bancorporation |
| Banc of California, |
Westamerica Bancorporation and Banc Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westamerica Bancorporation and Banc Of
The main advantage of trading using opposite Westamerica Bancorporation and Banc Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westamerica Bancorporation position performs unexpectedly, Banc Of 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 Banc Of will offset losses from the drop in Banc Of's long position.| Westamerica Bancorporation vs. Heritage Commerce Corp | Westamerica Bancorporation vs. Heritage Financial | Westamerica Bancorporation vs. Penns Woods Bancorp | Westamerica Bancorporation vs. 1st Source |
| Banc Of vs. Peapack Gladstone Financial | Banc Of vs. Northfield Bancorp | Banc Of vs. Great Southern Bancorp | Banc Of vs. Heritage Financial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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