Correlation Between Oak Valley and Luther Burbank

Can any of the company-specific risk be diversified away by investing in both Oak Valley and Luther Burbank 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 Oak Valley and Luther Burbank into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Oak Valley and Luther Burbank

0.0

Correlation Coefficient

Oak Valley  Luther Burbank

Pay attention - limited upside

The 3 months correlation between Oak and Luther is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oak Valley Bancorp and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank and Oak Valley 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 Oak Valley Bancorp are associated (or correlated) with Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of Oak Valley i.e., Oak Valley and Luther Burbank go up and down completely randomly.

Pair Corralation between Oak Valley and Luther Burbank

If you would invest (100.00) in Luther Burbank on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Luther Burbank or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Oak Valley Bancorp  vs.  Luther Burbank

Oak Valley Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oak Valley Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Luther Burbank

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Oak Valley and Luther Burbank

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

The idea behind Oak Valley Bancorp and Luther Burbank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.