Correlation Between American National and Westamerica Bancorporation
Can any of the company-specific risk be diversified away by investing in both American National and Westamerica Bancorporation 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 American National and Westamerica Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American National Bankshares and Westamerica Bancorporation, you can compare the effects of market volatilities on American National and Westamerica Bancorporation 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 American National with a short position of Westamerica Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of American National and Westamerica Bancorporation.
Diversification Opportunities for American National and Westamerica Bancorporation
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Westamerica is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding American National Bankshares and Westamerica Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westamerica Bancorporation and American National 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 American National Bankshares are associated (or correlated) with Westamerica Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westamerica Bancorporation has no effect on the direction of American National i.e., American National and Westamerica Bancorporation go up and down completely randomly.
Pair Corralation between American National and Westamerica Bancorporation
If you would invest 4,900 in Westamerica Bancorporation on August 30, 2024 and sell it today you would earn a total of 854.00 from holding Westamerica Bancorporation or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
American National Bankshares vs. Westamerica Bancorp.
Performance |
| Timeline |
| American National |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Westamerica Bancorporation |
American National and Westamerica Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American National and Westamerica Bancorporation
The main advantage of trading using opposite American National and Westamerica Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American National position performs unexpectedly, Westamerica Bancorporation 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 Westamerica Bancorporation will offset losses from the drop in Westamerica Bancorporation's long position.| American National vs. First Northwest Bancorp | American National vs. Community West Bancshares | American National vs. First Financial Northwest | American National vs. Great Southern Bancorp |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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