Correlation Between Alpha Bank and WesBanco
Can any of the company-specific risk be diversified away by investing in both Alpha Bank and WesBanco 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 Alpha Bank and WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Bank SA and WesBanco, you can compare the effects of market volatilities on Alpha Bank and WesBanco 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 Alpha Bank with a short position of WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and WesBanco.
Diversification Opportunities for Alpha Bank and WesBanco
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alpha and WesBanco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and Alpha Bank 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 Alpha Bank SA are associated (or correlated) with WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Alpha Bank i.e., Alpha Bank and WesBanco go up and down completely randomly.
Pair Corralation between Alpha Bank and WesBanco
Assuming the 90 days horizon Alpha Bank SA is expected to generate 2.99 times more return on investment than WesBanco. However, Alpha Bank is 2.99 times more volatile than WesBanco. It trades about 0.03 of its potential returns per unit of risk. WesBanco is currently generating about 0.03 per unit of risk. If you would invest 31.00 in Alpha Bank SA on October 29, 2024 and sell it today you would earn a total of 10.00 from holding Alpha Bank SA or generate 32.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Bank SA vs. WesBanco
Performance |
| Timeline |
| Alpha Bank SA |
| WesBanco |
Alpha Bank and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Bank and WesBanco
The main advantage of trading using opposite Alpha Bank and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco's long position.| Alpha Bank vs. First Hawaiian | Alpha Bank vs. Central Pacific Financial | Alpha Bank vs. Territorial Bancorp | Alpha Bank vs. Comerica |
| WesBanco vs. Alaska Air Group | WesBanco vs. Tesla Inc | WesBanco vs. Modine Manufacturing | WesBanco vs. China Southern Airlines |
Check out your portfolio center.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.
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