Correlation Between Southern California and BOK Financial
Can any of the company-specific risk be diversified away by investing in both Southern California and BOK 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 Southern California and BOK Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern California Bancorp and BOK Financial, you can compare the effects of market volatilities on Southern California and BOK 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 Southern California with a short position of BOK Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern California and BOK Financial.
Diversification Opportunities for Southern California and BOK Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southern and BOK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southern California Bancorp and BOK Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOK Financial and Southern California 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 Southern California Bancorp are associated (or correlated) with BOK Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOK Financial has no effect on the direction of Southern California i.e., Southern California and BOK Financial go up and down completely randomly.
Pair Corralation between Southern California and BOK Financial
Given the investment horizon of 90 days Southern California Bancorp is expected to under-perform the BOK Financial. But the stock apears to be less risky and, when comparing its historical volatility, Southern California Bancorp is 1.76 times less risky than BOK Financial. The stock trades about -0.42 of its potential returns per unit of risk. The BOK Financial is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 9,370 in BOK Financial on March 14, 2024 and sell it today you would lose (401.00) from holding BOK Financial or give up 4.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Southern California Bancorp vs. BOK Financial
Performance |
Timeline |
Southern California |
BOK Financial |
Southern California and BOK Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southern California and BOK Financial
The main advantage of trading using opposite Southern California and BOK Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern California position performs unexpectedly, BOK 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 BOK Financial will offset losses from the drop in BOK Financial's long position.Southern California vs. Avidbank Holdings | Southern California vs. American Riviera Bank | Southern California vs. Private Bancorp of |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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