Correlation Between NYSE Composite and WSFS Financial
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and WSFS 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 NYSE Composite and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and WSFS Financial, you can compare the effects of market volatilities on NYSE Composite and WSFS 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 NYSE Composite with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and WSFS Financial.
Diversification Opportunities for NYSE Composite and WSFS Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and WSFS is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and NYSE Composite 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 NYSE Composite are associated (or correlated) with WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of NYSE Composite i.e., NYSE Composite and WSFS Financial go up and down completely randomly.
Pair Corralation between NYSE Composite and WSFS Financial
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.47 times less return on investment than WSFS Financial. But when comparing it to its historical volatility, NYSE Composite is 4.22 times less risky than WSFS Financial. It trades about 0.15 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,377 in WSFS Financial on August 28, 2024 and sell it today you would earn a total of 732.00 from holding WSFS Financial or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. WSFS Financial
Performance |
| Timeline |
NYSE Composite and WSFS Financial Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
WSFS Financial
Pair trading matchups for WSFS Financial
Pair Trading with NYSE Composite and WSFS Financial
The main advantage of trading using opposite NYSE Composite and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, WSFS 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 WSFS Financial will offset losses from the drop in WSFS Financial's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| WSFS Financial vs. Fifth Third Bancorp | WSFS Financial vs. Zions Bancorporation | WSFS Financial vs. Huntington Bancshares Incorporated | WSFS Financial vs. Comerica |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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