Correlation Between First Mid and Washington Federal
Can any of the company-specific risk be diversified away by investing in both First Mid and Washington Federal 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 First Mid and Washington Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Mid Illinois and Washington Federal, you can compare the effects of market volatilities on First Mid and Washington Federal 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 First Mid with a short position of Washington Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Mid and Washington Federal.
Diversification Opportunities for First Mid and Washington Federal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Washington is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding First Mid Illinois and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal and First Mid 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 First Mid Illinois are associated (or correlated) with Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of First Mid i.e., First Mid and Washington Federal go up and down completely randomly.
Pair Corralation between First Mid and Washington Federal
Given the investment horizon of 90 days First Mid Illinois is expected to generate 0.86 times more return on investment than Washington Federal. However, First Mid Illinois is 1.16 times less risky than Washington Federal. It trades about 0.04 of its potential returns per unit of risk. Washington Federal is currently generating about 0.03 per unit of risk. If you would invest 3,180 in First Mid Illinois on August 29, 2024 and sell it today you would earn a total of 1,038 from holding First Mid Illinois or generate 32.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Mid Illinois vs. Washington Federal
Performance |
| Timeline |
| First Mid Illinois |
| Washington Federal |
First Mid and Washington Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Mid and Washington Federal
The main advantage of trading using opposite First Mid and Washington Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Mid position performs unexpectedly, Washington Federal 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 Federal will offset losses from the drop in Washington Federal's long position.| First Mid vs. Finward Bancorp | First Mid vs. Great Southern Bancorp | First Mid vs. Franklin Financial Services | First Mid vs. Community West Bancshares |
| Washington Federal vs. Finward Bancorp | Washington Federal vs. Great Southern Bancorp | Washington Federal vs. First Mid Illinois | Washington Federal vs. Franklin Financial Services |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |