Correlation Between Hancock Whitney and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Hancock Whitney and Waterstone 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 Hancock Whitney and Waterstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hancock Whitney Corp and Waterstone Financial, you can compare the effects of market volatilities on Hancock Whitney and Waterstone 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 Hancock Whitney with a short position of Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hancock Whitney and Waterstone Financial.
Diversification Opportunities for Hancock Whitney and Waterstone Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hancock and Waterstone is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hancock Whitney Corp and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial and Hancock Whitney 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 Hancock Whitney Corp are associated (or correlated) with Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Hancock Whitney i.e., Hancock Whitney and Waterstone Financial go up and down completely randomly.
Pair Corralation between Hancock Whitney and Waterstone Financial
Considering the 90-day investment horizon Hancock Whitney Corp is expected to generate 1.11 times more return on investment than Waterstone Financial. However, Hancock Whitney is 1.11 times more volatile than Waterstone Financial. It trades about 0.08 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.03 per unit of risk. If you would invest 3,175 in Hancock Whitney Corp on August 31, 2024 and sell it today you would earn a total of 2,819 from holding Hancock Whitney Corp or generate 88.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hancock Whitney Corp vs. Waterstone Financial
Performance |
| Timeline |
| Hancock Whitney Corp |
| Waterstone Financial |
Hancock Whitney and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hancock Whitney and Waterstone Financial
The main advantage of trading using opposite Hancock Whitney and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hancock Whitney position performs unexpectedly, Waterstone 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney vs. Great Southern Bancorp |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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