Correlation Between Westamerica Bancorporation and First Citizens
Can any of the company-specific risk be diversified away by investing in both Westamerica Bancorporation and First Citizens 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 First Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westamerica Bancorporation and First Citizens BancShares, you can compare the effects of market volatilities on Westamerica Bancorporation and First Citizens 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 First Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westamerica Bancorporation and First Citizens.
Diversification Opportunities for Westamerica Bancorporation and First Citizens
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Westamerica and First is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Westamerica Bancorp. and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Westamerica Bancorporation i.e., Westamerica Bancorporation and First Citizens go up and down completely randomly.
Pair Corralation between Westamerica Bancorporation and First Citizens
Given the investment horizon of 90 days Westamerica Bancorporation is expected to generate 0.81 times more return on investment than First Citizens. However, Westamerica Bancorporation is 1.24 times less risky than First Citizens. It trades about -0.22 of its potential returns per unit of risk. First Citizens BancShares is currently generating about -0.24 per unit of risk. If you would invest 5,198 in Westamerica Bancorporation on November 27, 2024 and sell it today you would lose (278.00) from holding Westamerica Bancorporation or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westamerica Bancorp. vs. First Citizens BancShares
Performance |
| Timeline |
| Westamerica Bancorporation |
| First Citizens BancShares |
Westamerica Bancorporation and First Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westamerica Bancorporation and First Citizens
The main advantage of trading using opposite Westamerica Bancorporation and First Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westamerica Bancorporation position performs unexpectedly, First Citizens 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 First Citizens will offset losses from the drop in First Citizens' long position.| Westamerica Bancorporation vs. Heritage Commerce Corp | Westamerica Bancorporation vs. Heritage Financial | Westamerica Bancorporation vs. Penns Woods Bancorp | Westamerica Bancorporation vs. 1st Source |
| First Citizens vs. Zions Bancorporation | First Citizens vs. KeyCorp | First Citizens vs. Comerica | First Citizens 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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