Correlation Between Bank of San Francisco and William Penn
Can any of the company-specific risk be diversified away by investing in both Bank of San Francisco and William Penn 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 Francisco and William Penn 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 William Penn Bancorp, you can compare the effects of market volatilities on Bank of San Francisco and William Penn 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 Francisco with a short position of William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of San Francisco and William Penn.
Diversification Opportunities for Bank of San Francisco and William Penn
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and William is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bank of San and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn Bancorp and Bank of San Francisco 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of Bank of San Francisco i.e., Bank of San Francisco and William Penn go up and down completely randomly.
Pair Corralation between Bank of San Francisco and William Penn
Given the investment horizon of 90 days Bank of San Francisco is expected to generate 1.41 times less return on investment than William Penn. But when comparing it to its historical volatility, Bank of San is 1.06 times less risky than William Penn. It trades about 0.02 of its potential returns per unit of risk. William Penn Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,137 in William Penn Bancorp on August 29, 2024 and sell it today you would earn a total of 193.00 from holding William Penn Bancorp or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of San vs. William Penn Bancorp
Performance |
| Timeline |
| Bank of San Francisco |
| William Penn Bancorp |
Bank of San Francisco and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of San Francisco and William Penn
The main advantage of trading using opposite Bank of San Francisco and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of San Francisco position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn's long position.| Bank of San Francisco vs. Pioneer Bankcorp | Bank of San Francisco vs. Liberty Northwest Bancorp | Bank of San Francisco vs. Summit Bancshares | Bank of San Francisco vs. Washington Business Bank |
| William Penn vs. Fifth Third Bancorp | William Penn vs. Huntington Bancshares Incorporated | William Penn vs. MT Bank |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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