Correlation Between Pacific Premier and Equity Bancshares,

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

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

Diversification Opportunities for Pacific Premier and Equity Bancshares,

0.87

Correlation Coefficient

Pacific Premier  Equity Bancshares,

Very poor diversification

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

Pair Corralation between Pacific Premier and Equity Bancshares,

Given the investment horizon of 90 days Pacific Premier Bancorp is expected to generate 1.46 times more return on investment than Equity Bancshares,. However, Pacific Premier is 1.46 times more volatile than Equity Bancshares,. It trades about -0.3 of its potential returns per unit of risk. Equity Bancshares, is currently generating about -0.45 per unit of risk. If you would invest  2,769  in Pacific Premier Bancorp on October 5, 2024 and sell it today you would lose (318.00) from holding Pacific Premier Bancorp or give up 11.48% of portfolio value over 90 days.

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

Pacific Premier Bancorp  vs.  Equity Bancshares,

Pacific Premier Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Premier Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Pacific Premier is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Equity Bancshares,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Equity Bancshares, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Equity Bancshares, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pacific Premier and Equity Bancshares,

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

The idea behind Pacific Premier Bancorp and Equity 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.