Correlation Between Five Star and Heritage Financial
Can any of the company-specific risk be diversified away by investing in both Five Star 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 Five Star and Heritage Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Star Bancorp and Heritage Financial, you can compare the effects of market volatilities on Five Star 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 Five Star with a short position of Heritage Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Star and Heritage Financial.
Diversification Opportunities for Five Star and Heritage Financial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Five and Heritage is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Five Star Bancorp and Heritage Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Financial and Five Star 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 Five Star 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 Five Star i.e., Five Star and Heritage Financial go up and down completely randomly.
Pair Corralation between Five Star and Heritage Financial
Given the investment horizon of 90 days Five Star Bancorp is expected to generate 1.11 times more return on investment than Heritage Financial. However, Five Star is 1.11 times more volatile than Heritage Financial. It trades about 0.11 of its potential returns per unit of risk. Heritage Financial is currently generating about 0.06 per unit of risk. If you would invest 3,267 in Five Star Bancorp on September 13, 2025 and sell it today you would earn a total of 449.00 from holding Five Star Bancorp or generate 13.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Star Bancorp vs. Heritage Financial
Performance |
| Timeline |
| Five Star Bancorp |
| Heritage Financial |
Five Star and Heritage Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Star and Heritage Financial
The main advantage of trading using opposite Five Star and Heritage Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Star 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.| Five Star vs. Heritage Financial | Five Star vs. Hbt Financial | Five Star vs. Central Pacific Financial | Five Star vs. Business First Bancshares |
| Heritage Financial vs. Five Star Bancorp | Heritage Financial vs. Hbt Financial | Heritage Financial vs. Central Pacific Financial | Heritage Financial vs. Hanmi Financial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |