Correlation Between Interface and TriCo Bancshares

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

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

Diversification Opportunities for Interface and TriCo Bancshares

0.85

Correlation Coefficient

Interface  TriCo Bancshares

Very poor diversification

The 3 months correlation between Interface and TriCo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Interface and TriCo Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriCo Bancshares and Interface 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 Interface are associated (or correlated) with TriCo Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriCo Bancshares has no effect on the direction of Interface i.e., Interface and TriCo Bancshares go up and down completely randomly.

Pair Corralation between Interface and TriCo Bancshares

Given the investment horizon of 90 days Interface is expected to generate 1.24 times more return on investment than TriCo Bancshares. However, Interface is 1.24 times more volatile than TriCo Bancshares. It trades about 0.07 of its potential returns per unit of risk. TriCo Bancshares is currently generating about 0.06 per unit of risk. If you would invest  1,922  in Interface on May 2, 2025 and sell it today you would earn a total of  142.00  from holding Interface or generate 7.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Interface  vs.  TriCo Bancshares

Interface

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 5 (%) 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.

TriCo Bancshares

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TriCo Bancshares are ranked lower than 4 (%) 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.

Pair Trading with Interface and TriCo Bancshares

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

The idea behind Interface and TriCo Bancshares 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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.