Correlation Between Heartland Financial and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Heartland Financial 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 Heartland Financial and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Wintrust Financial Corp, you can compare the effects of market volatilities on Heartland Financial 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 Heartland Financial with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Wintrust Financial.
Diversification Opportunities for Heartland Financial and Wintrust Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heartland and Wintrust is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA 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 Heartland Financial 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 Heartland Financial USA 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 Heartland Financial i.e., Heartland Financial and Wintrust Financial go up and down completely randomly.
Pair Corralation between Heartland Financial and Wintrust Financial
Assuming the 90 days horizon Heartland Financial is expected to generate 1.07 times less return on investment than Wintrust Financial. In addition to that, Heartland Financial is 3.11 times more volatile than Wintrust Financial Corp. It trades about 0.08 of its total potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.26 per unit of volatility. If you would invest 2,486 in Wintrust Financial Corp on October 20, 2024 and sell it today you would earn a total of 22.00 from holding Wintrust Financial Corp or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Wintrust Financial Corp
Performance |
| Timeline |
| Heartland Financial USA |
| Wintrust Financial Corp |
Heartland Financial and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Wintrust Financial
The main advantage of trading using opposite Heartland Financial and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial 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.| Heartland Financial vs. Wintrust Financial Corp | Heartland Financial vs. Pinnacle Financial Partners | Heartland Financial vs. WesBanco | Heartland Financial vs. OceanFirst Financial Corp |
| Wintrust Financial vs. Wintrust Financial Corp | Wintrust Financial vs. WesBanco | Wintrust Financial vs. Heartland Financial USA | Wintrust Financial vs. Pinnacle Financial Partners |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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