Correlation Between Equity Bancshares, and Washington Trust
Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and Washington Trust 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 Equity Bancshares, and Washington Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Bancshares, and Washington Trust Bancorp, you can compare the effects of market volatilities on Equity Bancshares, and Washington Trust 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 Equity Bancshares, with a short position of Washington Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Washington Trust.
Diversification Opportunities for Equity Bancshares, and Washington Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and Washington is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Washington Trust Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Trust Bancorp and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Washington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Trust Bancorp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Washington Trust go up and down completely randomly.
Pair Corralation between Equity Bancshares, and Washington Trust
Given the investment horizon of 90 days Equity Bancshares, is expected to generate 0.7 times more return on investment than Washington Trust. However, Equity Bancshares, is 1.42 times less risky than Washington Trust. It trades about 0.19 of its potential returns per unit of risk. Washington Trust Bancorp is currently generating about 0.09 per unit of risk. If you would invest 4,332 in Equity Bancshares, on August 30, 2024 and sell it today you would earn a total of 494.00 from holding Equity Bancshares, or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Bancshares, vs. Washington Trust Bancorp
Performance |
| Timeline |
| Equity Bancshares, |
| Washington Trust Bancorp |
Equity Bancshares, and Washington Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Bancshares, and Washington Trust
The main advantage of trading using opposite Equity Bancshares, and Washington Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, Washington Trust 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 Trust will offset losses from the drop in Washington Trust's long position.| Equity Bancshares, vs. Brookline Bancorp | Equity Bancshares, vs. Kearny Financial Corp | Equity Bancshares, vs. Heritage Financial | Equity Bancshares, vs. FVCBankcorp |
| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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