Correlation Between Westamerica Bancorporation and Origin Bancorp,

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

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

Diversification Opportunities for Westamerica Bancorporation and Origin Bancorp,

0.89

Correlation Coefficient

Westamerica Bancorporation  Origin Bancorp,

Very poor diversification

The 3 months correlation between Westamerica and Origin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Westamerica Bancorp. and Origin Bancorp, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Bancorp, and Westamerica Bancorporation 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 Westamerica Bancorporation are associated (or correlated) with Origin Bancorp,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Bancorp, has no effect on the direction of Westamerica Bancorporation i.e., Westamerica Bancorporation and Origin Bancorp, go up and down completely randomly.

Pair Corralation between Westamerica Bancorporation and Origin Bancorp,

Given the investment horizon of 90 days Westamerica Bancorporation is expected to generate 0.88 times more return on investment than Origin Bancorp,. However, Westamerica Bancorporation is 1.14 times less risky than Origin Bancorp,. It trades about 0.01 of its potential returns per unit of risk. Origin Bancorp, is currently generating about 0.0 per unit of risk. If you would invest  5,046  in Westamerica Bancorporation on October 10, 2024 and sell it today you would earn a total of  34.00  from holding Westamerica Bancorporation or generate 0.67% return on investment over 90 days.

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

Westamerica Bancorp.  vs.  Origin Bancorp,

Westamerica Bancorporation

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Westamerica Bancorporation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental drivers, Westamerica Bancorporation may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Origin Bancorp,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Bancorp, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental drivers, Origin Bancorp, may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Westamerica Bancorporation and Origin Bancorp,

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

The idea behind Westamerica Bancorporation and Origin Bancorp, 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.