Correlation Between Mission Bancorp and Savi Financial

Can any of the company-specific risk be diversified away by investing in both Mission Bancorp and Savi Financial 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 Mission Bancorp and Savi Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mission Bancorp and Savi Financial, you can compare the effects of market volatilities on Mission Bancorp and Savi Financial 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 Mission Bancorp with a short position of Savi Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mission Bancorp and Savi Financial.

Diversification Opportunities for Mission Bancorp and Savi Financial

-0.49

Correlation Coefficient

Mission Bancorp  Savi Financial

Very good diversification

The 3 months correlation between Mission and Savi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mission Bancorp and Savi Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savi Financial and Mission 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 Mission Bancorp are associated (or correlated) with Savi Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savi Financial has no effect on the direction of Mission Bancorp i.e., Mission Bancorp and Savi Financial go up and down completely randomly.

Pair Corralation between Mission Bancorp and Savi Financial

If you would invest  1,470  in Savi Financial on October 26, 2024 and sell it today you would earn a total of  40.00  from holding Savi Financial or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.69%
Values	Daily Returns

Mission Bancorp  vs.  Savi Financial

Mission Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mission Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Mission Bancorp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Savi Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Savi Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Savi Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mission Bancorp and Savi Financial

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

The idea behind Mission Bancorp and Savi Financial 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.