Correlation Between Bank of San and Washington Business
Can any of the company-specific risk be diversified away by investing in both Bank of San and Washington Business 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 Bank of San and Washington Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of San and Washington Business Bank, you can compare the effects of market volatilities on Bank of San and Washington Business 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 Bank of San with a short position of Washington Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of San and Washington Business.
Diversification Opportunities for Bank of San and Washington Business
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Washington is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank of San and Washington Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Business Bank and Bank of San 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 Bank of San are associated (or correlated) with Washington Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Business Bank has no effect on the direction of Bank of San i.e., Bank of San and Washington Business go up and down completely randomly.
Pair Corralation between Bank of San and Washington Business
Given the investment horizon of 90 days Bank of San is expected to generate 1.11 times less return on investment than Washington Business. In addition to that, Bank of San is 1.34 times more volatile than Washington Business Bank. It trades about 0.1 of its total potential returns per unit of risk. Washington Business Bank is currently generating about 0.14 per unit of volatility. If you would invest 3,105 in Washington Business Bank on September 3, 2024 and sell it today you would earn a total of 495.00 from holding Washington Business Bank or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Bank of San vs. Washington Business Bank
Performance |
| Timeline |
| Bank of San |
| Washington Business Bank |
Bank of San and Washington Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of San and Washington Business
The main advantage of trading using opposite Bank of San and Washington Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of San position performs unexpectedly, Washington Business 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 Washington Business will offset losses from the drop in Washington Business' long position.| Bank of San vs. First Hawaiian | Bank of San vs. Central Pacific Financial | Bank of San vs. Territorial Bancorp | Bank of San vs. Comerica |
| Washington Business vs. First Hawaiian | Washington Business vs. Central Pacific Financial | Washington Business vs. Territorial Bancorp | Washington Business vs. Comerica |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |