Correlation Between Banc Of and Guaranty Bancshares,

Can any of the company-specific risk be diversified away by investing in both Banc Of and Guaranty Bancshares, 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 Banc Of and Guaranty Bancshares, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Banc of California and Guaranty Bancshares,, you can compare the effects of market volatilities on Banc Of and Guaranty Bancshares, 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 Banc Of with a short position of Guaranty Bancshares,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banc Of and Guaranty Bancshares,.

Diversification Opportunities for Banc Of and Guaranty Bancshares,

0.87

Correlation Coefficient

Banc Of  Guaranty Bancshares,

Very poor diversification

The 3 months correlation between Banc and Guaranty is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Banc of California and Guaranty Bancshares, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Bancshares, and Banc Of 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 Banc of California are associated (or correlated) with Guaranty Bancshares,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Bancshares, has no effect on the direction of Banc Of i.e., Banc Of and Guaranty Bancshares, go up and down completely randomly.

Pair Corralation between Banc Of and Guaranty Bancshares,

Assuming the 90 days trading horizon Banc Of is expected to generate 1.28 times less return on investment than Guaranty Bancshares,. But when comparing it to its historical volatility, Banc of California is 2.62 times less risky than Guaranty Bancshares,. It trades about 0.05 of its potential returns per unit of risk. Guaranty Bancshares, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,385  in Guaranty Bancshares, on September 19, 2024 and sell it today you would earn a total of  278.00  from holding Guaranty Bancshares, or generate 8.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Banc of California  vs.  Guaranty Bancshares,

Banc of California

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Banc of California are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Banc Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Guaranty Bancshares,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Guaranty Bancshares, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Banc Of and Guaranty Bancshares,

The main advantage of trading using opposite Banc Of and Guaranty Bancshares, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banc Of position performs unexpectedly, Guaranty Bancshares, 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 Guaranty Bancshares, will offset losses from the drop in Guaranty Bancshares,'s long position.

The idea behind Banc of California and Guaranty Bancshares, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.