Correlation Between RBB Bancorp and Consumer Portfolio

Can any of the company-specific risk be diversified away by investing in both RBB Bancorp and Consumer Portfolio 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 RBB Bancorp and Consumer Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RBB Bancorp and Consumer Portfolio Services, you can compare the effects of market volatilities on RBB Bancorp and Consumer Portfolio 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 RBB Bancorp with a short position of Consumer Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBB Bancorp and Consumer Portfolio.

Diversification Opportunities for RBB Bancorp and Consumer Portfolio

-0.31

Correlation Coefficient

RBB Bancorp  Consumer Portfolio

Very good diversification

The 3 months correlation between RBB and Consumer is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding RBB Bancorp and Consumer Portfolio Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Portfolio and RBB Bancorp 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 RBB Bancorp are associated (or correlated) with Consumer Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Portfolio has no effect on the direction of RBB Bancorp i.e., RBB Bancorp and Consumer Portfolio go up and down completely randomly.

Pair Corralation between RBB Bancorp and Consumer Portfolio

Considering the 90-day investment horizon RBB Bancorp is expected to generate 0.93 times more return on investment than Consumer Portfolio. However, RBB Bancorp is 1.08 times less risky than Consumer Portfolio. It trades about 0.14 of its potential returns per unit of risk. Consumer Portfolio Services is currently generating about 0.0 per unit of risk. If you would invest  1,685  in RBB Bancorp on May 16, 2025 and sell it today you would earn a total of  300.00  from holding RBB Bancorp or generate 17.8% return on investment over 90 days.

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

RBB Bancorp  vs.  Consumer Portfolio Services

RBB Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RBB Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, RBB Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Consumer Portfolio

Risk-Adjusted Performance

Weakest

Over the last 90 days Consumer Portfolio Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Consumer Portfolio is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with RBB Bancorp and Consumer Portfolio

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

The idea behind RBB Bancorp and Consumer Portfolio Services 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.