Correlation Between TriCo Bancshares and Interface

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

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

Diversification Opportunities for TriCo Bancshares and Interface

0.86

Correlation Coefficient

TriCo Bancshares  Interface

Very poor diversification

The 3 months correlation between TriCo and Interface is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface and TriCo Bancshares 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 TriCo Bancshares are associated (or correlated) with Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and Interface go up and down completely randomly.

Pair Corralation between TriCo Bancshares and Interface

Given the investment horizon of 90 days TriCo Bancshares is expected to generate 0.79 times more return on investment than Interface. However, TriCo Bancshares is 1.26 times less risky than Interface. It trades about 0.14 of its potential returns per unit of risk. Interface is currently generating about 0.1 per unit of risk. If you would invest  3,872  in TriCo Bancshares on April 29, 2025 and sell it today you would earn a total of  483.00  from holding TriCo Bancshares or generate 12.47% return on investment over 90 days.

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

TriCo Bancshares  vs.  Interface

TriCo Bancshares

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TriCo Bancshares are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, TriCo Bancshares disclosed solid returns over the last few months and may actually be approaching a breakup point.

Interface

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TriCo Bancshares and Interface

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

The idea behind TriCo Bancshares and Interface 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.