Correlation Between TriCo Bancshares and Univest Pennsylvania

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

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

Diversification Opportunities for TriCo Bancshares and Univest Pennsylvania

0.7

Correlation Coefficient

TriCo Bancshares  Univest Pennsylvania

Poor diversification

The 3 months correlation between TriCo and Univest is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and Univest Pennsylvania go up and down completely randomly.

Pair Corralation between TriCo Bancshares and Univest Pennsylvania

Given the investment horizon of 90 days TriCo Bancshares is expected to generate 0.86 times more return on investment than Univest Pennsylvania. However, TriCo Bancshares is 1.17 times less risky than Univest Pennsylvania. It trades about 0.04 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about -0.06 per unit of risk. If you would invest  3,892  in TriCo Bancshares on May 3, 2025 and sell it today you would earn a total of  134.00  from holding TriCo Bancshares or generate 3.44% return on investment over 90 days.

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

TriCo Bancshares  vs.  Univest Pennsylvania

TriCo Bancshares

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TriCo Bancshares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, TriCo Bancshares is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Univest Pennsylvania

Risk-Adjusted Performance

Very Weak

Over the last 90 days Univest Pennsylvania has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with TriCo Bancshares and Univest Pennsylvania

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

The idea behind TriCo Bancshares and Univest Pennsylvania 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 Global Correlations module to find global opportunities by holding instruments from different markets.