Correlation Between CullenFrost Bankers and Sierra Bancorp
Can any of the company-specific risk be diversified away by investing in both CullenFrost Bankers and Sierra 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 CullenFrost Bankers and Sierra Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CullenFrost Bankers and Sierra Bancorp, you can compare the effects of market volatilities on CullenFrost Bankers and Sierra 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 CullenFrost Bankers with a short position of Sierra Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CullenFrost Bankers and Sierra Bancorp.
Diversification Opportunities for CullenFrost Bankers and Sierra Bancorp
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CullenFrost and Sierra is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CullenFrost Bankers and Sierra Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra Bancorp and CullenFrost Bankers 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 CullenFrost Bankers are associated (or correlated) with Sierra Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra Bancorp has no effect on the direction of CullenFrost Bankers i.e., CullenFrost Bankers and Sierra Bancorp go up and down completely randomly.
Pair Corralation between CullenFrost Bankers and Sierra Bancorp
Considering the 90-day investment horizon CullenFrost Bankers is expected to under-perform the Sierra Bancorp. But the stock apears to be less risky and, when comparing its historical volatility, CullenFrost Bankers is 1.21 times less risky than Sierra Bancorp. The stock trades about -0.01 of its potential returns per unit of risk. The Sierra Bancorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,859 in Sierra Bancorp on August 5, 2025 and sell it today you would earn a total of 19.00 from holding Sierra Bancorp or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CullenFrost Bankers vs. Sierra Bancorp
Performance |
| Timeline |
| CullenFrost Bankers |
| Sierra Bancorp |
CullenFrost Bankers and Sierra Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CullenFrost Bankers and Sierra Bancorp
The main advantage of trading using opposite CullenFrost Bankers and Sierra Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CullenFrost Bankers position performs unexpectedly, Sierra 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 Sierra Bancorp will offset losses from the drop in Sierra Bancorp's long position.| CullenFrost Bankers vs. Commerce Bancshares | CullenFrost Bankers vs. Old National Bancorp | CullenFrost Bankers vs. Popular | CullenFrost Bankers vs. Wintrust Financial |
| Sierra Bancorp vs. First Bank | Sierra Bancorp vs. Greene County Bancorp | Sierra Bancorp vs. Blue Ridge Bankshares | Sierra Bancorp vs. Community West Bancshares |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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