Correlation Between TriCo Bancshares and BOC Hong
Can any of the company-specific risk be diversified away by investing in both TriCo Bancshares and BOC Hong 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 TriCo Bancshares and BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriCo Bancshares and BOC Hong Kong, you can compare the effects of market volatilities on TriCo Bancshares and BOC Hong 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 TriCo Bancshares with a short position of BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriCo Bancshares and BOC Hong.
Diversification Opportunities for TriCo Bancshares and BOC Hong
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between TriCo and BOC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong and TriCo Bancshares 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 TriCo Bancshares are associated (or correlated) with BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and BOC Hong go up and down completely randomly.
Pair Corralation between TriCo Bancshares and BOC Hong
Given the investment horizon of 90 days TriCo Bancshares is expected to generate 1.46 times more return on investment than BOC Hong. However, TriCo Bancshares is 1.46 times more volatile than BOC Hong Kong. It trades about 0.08 of its potential returns per unit of risk. BOC Hong Kong is currently generating about 0.07 per unit of risk. If you would invest 4,305 in TriCo Bancshares on September 15, 2024 and sell it today you would earn a total of 499.00 from holding TriCo Bancshares or generate 11.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TriCo Bancshares vs. BOC Hong Kong
Performance |
Timeline |
TriCo Bancshares |
BOC Hong Kong |
TriCo Bancshares and BOC Hong Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TriCo Bancshares and BOC Hong
The main advantage of trading using opposite TriCo Bancshares and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriCo Bancshares position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.TriCo Bancshares vs. First Northwest Bancorp | TriCo Bancshares vs. Community West Bancshares | TriCo Bancshares vs. First Financial Northwest | TriCo Bancshares vs. Great Southern Bancorp |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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