Correlation Between Luther Burbank and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Luther Burbank 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 Luther Burbank and Waterstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luther Burbank and Waterstone Financial, you can compare the effects of market volatilities on Luther Burbank 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 Luther Burbank with a short position of Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luther Burbank and Waterstone Financial.
Diversification Opportunities for Luther Burbank and Waterstone Financial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Luther and Waterstone is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Luther Burbank and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone Financial and Luther Burbank 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 Luther Burbank 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 Luther Burbank i.e., Luther Burbank and Waterstone Financial go up and down completely randomly.
Pair Corralation between Luther Burbank and Waterstone Financial
If you would invest 1,356 in Waterstone Financial on August 25, 2024 and sell it today you would earn a total of 182.00 from holding Waterstone Financial or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Luther Burbank vs. Waterstone Financial
Performance |
| Timeline |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Waterstone Financial |
Luther Burbank and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luther Burbank and Waterstone Financial
The main advantage of trading using opposite Luther Burbank and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luther Burbank 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.| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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