Correlation Between NYSE Composite and West Bancorporation
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and West Bancorporation 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 West Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and West Bancorporation, you can compare the effects of market volatilities on NYSE Composite and West Bancorporation 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 West Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and West Bancorporation.
Diversification Opportunities for NYSE Composite and West Bancorporation
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and West is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and West Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Bancorporation 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 West Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Bancorporation has no effect on the direction of NYSE Composite i.e., NYSE Composite and West Bancorporation go up and down completely randomly.
Pair Corralation between NYSE Composite and West Bancorporation
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.32 times more return on investment than West Bancorporation. However, NYSE Composite is 3.14 times less risky than West Bancorporation. It trades about 0.08 of its potential returns per unit of risk. West Bancorporation is currently generating about 0.02 per unit of risk. If you would invest 1,556,254 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 465,068 from holding NYSE Composite or generate 29.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. West Bancorp.
Performance |
| Timeline |
NYSE Composite and West Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
West Bancorporation
Pair trading matchups for West Bancorporation
Pair Trading with NYSE Composite and West Bancorporation
The main advantage of trading using opposite NYSE Composite and West Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, West Bancorporation 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 West Bancorporation will offset losses from the drop in West Bancorporation's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| West Bancorporation vs. JPMorgan Chase Co | West Bancorporation vs. Citigroup | West Bancorporation vs. Wells Fargo | West Bancorporation vs. Toronto Dominion Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |