Correlation Between Katahdin Bankshares and Western Asset
Can any of the company-specific risk be diversified away by investing in both Katahdin Bankshares and Western Asset 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 Katahdin Bankshares and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Katahdin Bankshares Corp and Western Asset Global, you can compare the effects of market volatilities on Katahdin Bankshares and Western Asset 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 Katahdin Bankshares with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Katahdin Bankshares and Western Asset.
Diversification Opportunities for Katahdin Bankshares and Western Asset
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Katahdin and Western is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Katahdin Bankshares Corp and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Katahdin Bankshares 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 Katahdin Bankshares Corp are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Katahdin Bankshares i.e., Katahdin Bankshares and Western Asset go up and down completely randomly.
Pair Corralation between Katahdin Bankshares and Western Asset
Given the investment horizon of 90 days Katahdin Bankshares Corp is expected to generate 3.37 times more return on investment than Western Asset. However, Katahdin Bankshares is 3.37 times more volatile than Western Asset Global. It trades about 0.03 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.04 per unit of risk. If you would invest 2,125 in Katahdin Bankshares Corp on September 13, 2024 and sell it today you would earn a total of 375.00 from holding Katahdin Bankshares Corp or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 77.33% |
| Values | Daily Returns |
Katahdin Bankshares Corp vs. Western Asset Global
Performance |
| Timeline |
| Katahdin Bankshares Corp |
| Western Asset Global |
Katahdin Bankshares and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Katahdin Bankshares and Western Asset
The main advantage of trading using opposite Katahdin Bankshares and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Katahdin Bankshares position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Katahdin Bankshares vs. Freedom Bank of | Katahdin Bankshares vs. HUMANA INC | Katahdin Bankshares vs. Barloworld Ltd ADR | Katahdin Bankshares vs. Morningstar Unconstrained Allocation |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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