Correlation Between Pacific Premier and Atlantic Union

Can any of the company-specific risk be diversified away by investing in both Pacific Premier and Atlantic Union 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 Pacific Premier and Atlantic Union into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Pacific Premier and Atlantic Union

0.72

Correlation Coefficient

Pacific Premier  Atlantic Union

Poor diversification

The 3 months correlation between Pacific and Atlantic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Premier Bancorp and Atlantic Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Union Bankshares and Pacific Premier 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 Pacific Premier Bancorp are associated (or correlated) with Atlantic Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Union Bankshares has no effect on the direction of Pacific Premier i.e., Pacific Premier and Atlantic Union go up and down completely randomly.

Pair Corralation between Pacific Premier and Atlantic Union

Given the investment horizon of 90 days Pacific Premier is expected to generate 1.98 times less return on investment than Atlantic Union. In addition to that, Pacific Premier is 1.19 times more volatile than Atlantic Union Bankshares. It trades about 0.05 of its total potential returns per unit of risk. Atlantic Union Bankshares is currently generating about 0.11 per unit of volatility. If you would invest  2,781  in Atlantic Union Bankshares on May 6, 2025 and sell it today you would earn a total of  342.00  from holding Atlantic Union Bankshares or generate 12.3% return on investment over 90 days.

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

Pacific Premier Bancorp  vs.  Atlantic Union Bankshares

Pacific Premier Bancorp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Premier Bancorp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Pacific Premier may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Atlantic Union Bankshares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantic Union Bankshares are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Atlantic Union sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pacific Premier and Atlantic Union

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

The idea behind Pacific Premier Bancorp and Atlantic Union Bankshares 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.