Correlation Between Kish Bancorp and WTB Financial
Can any of the company-specific risk be diversified away by investing in both Kish Bancorp and WTB 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 Kish Bancorp and WTB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kish Bancorp and WTB Financial, you can compare the effects of market volatilities on Kish Bancorp and WTB 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 Kish Bancorp with a short position of WTB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kish Bancorp and WTB Financial.
Diversification Opportunities for Kish Bancorp and WTB Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kish and WTB is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kish Bancorp and WTB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WTB Financial and Kish Bancorp 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 Kish Bancorp are associated (or correlated) with WTB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WTB Financial has no effect on the direction of Kish Bancorp i.e., Kish Bancorp and WTB Financial go up and down completely randomly.
Pair Corralation between Kish Bancorp and WTB Financial
Given the investment horizon of 90 days Kish Bancorp is expected to generate 2.29 times more return on investment than WTB Financial. However, Kish Bancorp is 2.29 times more volatile than WTB Financial. It trades about 0.11 of its potential returns per unit of risk. WTB Financial is currently generating about 0.06 per unit of risk. If you would invest 3,413 in Kish Bancorp on November 3, 2024 and sell it today you would earn a total of 87.00 from holding Kish Bancorp or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kish Bancorp vs. WTB Financial
Performance |
| Timeline |
| Kish Bancorp |
| WTB Financial |
Kish Bancorp and WTB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kish Bancorp and WTB Financial
The main advantage of trading using opposite Kish Bancorp and WTB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kish Bancorp position performs unexpectedly, WTB 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 WTB Financial will offset losses from the drop in WTB Financial's long position.| Kish Bancorp vs. CNB Corporation | Kish Bancorp vs. FNB Inc | Kish Bancorp vs. Community Bankers | Kish Bancorp vs. Apollo Bancorp |
| WTB Financial vs. Pioneer Bankcorp | WTB Financial vs. Liberty Northwest Bancorp | WTB Financial vs. First Community | WTB Financial vs. Coeur dAlene 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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