Correlation Between Overseas Chinese and Hancock Whitney

Can any of the company-specific risk be diversified away by investing in both Overseas Chinese and Hancock Whitney 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 Overseas Chinese and Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Overseas Chinese Banking and Hancock Whitney Corp, you can compare the effects of market volatilities on Overseas Chinese and Hancock Whitney 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 Overseas Chinese with a short position of Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Overseas Chinese and Hancock Whitney.

Diversification Opportunities for Overseas Chinese and Hancock Whitney

0.66

Correlation Coefficient

Overseas Chinese  Hancock Whitney

Poor diversification

The 3 months correlation between Overseas and Hancock is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Overseas Chinese Banking and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp and Overseas Chinese 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 Overseas Chinese Banking are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of Overseas Chinese i.e., Overseas Chinese and Hancock Whitney go up and down completely randomly.

Pair Corralation between Overseas Chinese and Hancock Whitney

Assuming the 90 days horizon Overseas Chinese Banking is expected to generate 0.53 times more return on investment than Hancock Whitney. However, Overseas Chinese Banking is 1.88 times less risky than Hancock Whitney. It trades about 0.08 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about 0.03 per unit of risk. If you would invest  1,629  in Overseas Chinese Banking on September 26, 2024 and sell it today you would earn a total of  894.00  from holding Overseas Chinese Banking or generate 54.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Overseas Chinese Banking  vs.  Hancock Whitney Corp

Overseas Chinese Banking

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Overseas Chinese Banking are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical indicators, Overseas Chinese may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hancock Whitney Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hancock Whitney Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Hancock Whitney may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Overseas Chinese and Hancock Whitney

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

The idea behind Overseas Chinese Banking and Hancock Whitney Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..