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
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heartland and Wintrust is 0.76. 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 USA is expected to generate 1.87 times more return on investment than Wintrust Financial. However, Heartland Financial is 1.87 times more volatile than Wintrust Financial Corp. It trades about 0.13 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.16 per unit of risk. If you would invest 2,496 in Heartland Financial USA on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Heartland Financial USA or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. Capital One Financial | Heartland Financial vs. Capital One Financial | Heartland Financial vs. Bank of America |
| Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Bank of America |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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