Correlation Between Old National and Westamerica Bancorporation
Can any of the company-specific risk be diversified away by investing in both Old National and Westamerica 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 Old National and Westamerica Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old National Bancorp and Westamerica Bancorporation, you can compare the effects of market volatilities on Old National and Westamerica 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 Old National with a short position of Westamerica Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old National and Westamerica Bancorporation.
Diversification Opportunities for Old National and Westamerica Bancorporation
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Westamerica is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and Westamerica Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westamerica Bancorporation and Old National 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 Old National Bancorp are associated (or correlated) with Westamerica Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westamerica Bancorporation has no effect on the direction of Old National i.e., Old National and Westamerica Bancorporation go up and down completely randomly.
Pair Corralation between Old National and Westamerica Bancorporation
Considering the 90-day investment horizon Old National Bancorp is expected to generate 1.19 times more return on investment than Westamerica Bancorporation. However, Old National is 1.19 times more volatile than Westamerica Bancorporation. It trades about 0.12 of its potential returns per unit of risk. Westamerica Bancorporation is currently generating about 0.09 per unit of risk. If you would invest 1,940 in Old National Bancorp on September 2, 2024 and sell it today you would earn a total of 376.00 from holding Old National Bancorp or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old National Bancorp vs. Westamerica Bancorp.
Performance |
| Timeline |
| Old National Bancorp |
| Westamerica Bancorporation |
Old National and Westamerica Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old National and Westamerica Bancorporation
The main advantage of trading using opposite Old National and Westamerica Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National position performs unexpectedly, Westamerica 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 Westamerica Bancorporation will offset losses from the drop in Westamerica Bancorporation's long position.| Old National vs. Independent Bank | Old National vs. First Financial Bancorp | Old National vs. Lakeland Financial | Old National vs. National Bank Holdings |
| Westamerica Bancorporation vs. Heritage Commerce Corp | Westamerica Bancorporation vs. Heritage Financial | Westamerica Bancorporation vs. Penns Woods Bancorp | Westamerica Bancorporation vs. 1st Source |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |