Correlation Between National Bank and WesBanco
Can any of the company-specific risk be diversified away by investing in both National Bank and WesBanco 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 National Bank and WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and WesBanco, you can compare the effects of market volatilities on National Bank and WesBanco 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 National Bank with a short position of WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and WesBanco.
Diversification Opportunities for National Bank and WesBanco
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and WesBanco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and National Bank 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 National Bank of are associated (or correlated) with WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of National Bank i.e., National Bank and WesBanco go up and down completely randomly.
Pair Corralation between National Bank and WesBanco
Assuming the 90 days horizon National Bank of is expected to generate 2.27 times more return on investment than WesBanco. However, National Bank is 2.27 times more volatile than WesBanco. It trades about 0.06 of its potential returns per unit of risk. WesBanco is currently generating about 0.02 per unit of risk. If you would invest 441.00 in National Bank of on October 14, 2024 and sell it today you would earn a total of 378.00 from holding National Bank of or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. WesBanco
Performance |
| Timeline |
| National Bank |
| WesBanco |
National Bank and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and WesBanco
The main advantage of trading using opposite National Bank and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco's long position.| National Bank vs. Alpha Bank SA | National Bank vs. Eurobank Ergasias SA | National Bank vs. Piraeus Bank SA | National Bank vs. PT Bank Central |
| WesBanco vs. Simon Property Group | WesBanco vs. Sonida Senior Living | WesBanco vs. Franklin Credit Management | WesBanco vs. Ameriprise Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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