Correlation Between RBB Bancorp and Heritage Financial
Can any of the company-specific risk be diversified away by investing in both RBB Bancorp and Heritage 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 RBB Bancorp and Heritage Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBB Bancorp and Heritage Financial, you can compare the effects of market volatilities on RBB Bancorp and Heritage 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 RBB Bancorp with a short position of Heritage Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBB Bancorp and Heritage Financial.
Diversification Opportunities for RBB Bancorp and Heritage Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between RBB and Heritage is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding RBB Bancorp and Heritage Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Financial and RBB 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 RBB Bancorp are associated (or correlated) with Heritage Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Financial has no effect on the direction of RBB Bancorp i.e., RBB Bancorp and Heritage Financial go up and down completely randomly.
Pair Corralation between RBB Bancorp and Heritage Financial
Considering the 90-day investment horizon RBB Bancorp is expected to under-perform the Heritage Financial. In addition to that, RBB Bancorp is 1.07 times more volatile than Heritage Financial. It trades about -0.19 of its total potential returns per unit of risk. Heritage Financial is currently generating about 0.02 per unit of volatility. If you would invest 2,409 in Heritage Financial on December 28, 2024 and sell it today you would earn a total of 30.00 from holding Heritage Financial or generate 1.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
RBB Bancorp vs. Heritage Financial
Performance |
Timeline |
RBB Bancorp |
Heritage Financial |
RBB Bancorp and Heritage Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RBB Bancorp and Heritage Financial
The main advantage of trading using opposite RBB Bancorp and Heritage Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBB Bancorp position performs unexpectedly, Heritage 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 Heritage Financial will offset losses from the drop in Heritage Financial's long position.RBB Bancorp vs. OP Bancorp | RBB Bancorp vs. Hanmi Financial | RBB Bancorp vs. Hope Bancorp | RBB Bancorp vs. Northeast Bancorp |
Heritage Financial vs. Heritage Commerce Corp | Heritage Financial vs. Horizon Bancorp | Heritage Financial vs. Independent Bank | Heritage Financial vs. Great Southern Bancorp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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