Correlation Between Auburn National and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Auburn National and Wintrust Financial 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 Auburn National and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and Wintrust Financial Corp, you can compare the effects of market volatilities on Auburn National and Wintrust Financial 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 Auburn National with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Wintrust Financial.
Diversification Opportunities for Auburn National and Wintrust Financial
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auburn and Wintrust is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp and Auburn 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 Auburn National Bancorporation are associated (or correlated) with Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial Corp has no effect on the direction of Auburn National i.e., Auburn National and Wintrust Financial go up and down completely randomly.
Pair Corralation between Auburn National and Wintrust Financial
Given the investment horizon of 90 days Auburn National is expected to generate 1.29 times less return on investment than Wintrust Financial. In addition to that, Auburn National is 1.49 times more volatile than Wintrust Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.03 per unit of volatility. If you would invest 2,223 in Wintrust Financial Corp on August 31, 2024 and sell it today you would earn a total of 297.00 from holding Wintrust Financial Corp or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.53% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Wintrust Financial Corp
Performance |
| Timeline |
| Auburn National Banc |
| Wintrust Financial Corp |
Auburn National and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Wintrust Financial
The main advantage of trading using opposite Auburn National and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Wintrust Financial 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 Wintrust Financial will offset losses from the drop in Wintrust Financial's long position.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
| Wintrust Financial vs. KeyCorp | Wintrust Financial vs. KeyCorp | Wintrust Financial vs. Fifth Third Bancorp | Wintrust Financial vs. Citizens Financial Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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