Correlation Between Old National and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Old National and Wintrust 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 Old National and Wintrust Financial 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 Wintrust Financial Corp, you can compare the effects of market volatilities on Old National and Wintrust 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 Old National with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old National and Wintrust Financial.
Diversification Opportunities for Old National and Wintrust Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Wintrust is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp 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 Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial Corp has no effect on the direction of Old National i.e., Old National and Wintrust Financial go up and down completely randomly.
Pair Corralation between Old National and Wintrust Financial
Considering the 90-day investment horizon Old National Bancorp is expected to generate 1.85 times more return on investment than Wintrust Financial. However, Old National is 1.85 times more volatile than Wintrust Financial Corp. It trades about 0.04 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.03 per unit of risk. If you would invest 1,701 in Old National Bancorp on September 2, 2024 and sell it today you would earn a total of 615.00 from holding Old National Bancorp or generate 36.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old National Bancorp vs. Wintrust Financial Corp
Performance |
| Timeline |
| Old National Bancorp |
| Wintrust Financial Corp |
Old National and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old National and Wintrust Financial
The main advantage of trading using opposite Old National and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National position performs unexpectedly, Wintrust 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 Wintrust Financial will offset losses from the drop in Wintrust Financial'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 |
| Wintrust Financial vs. KeyCorp | Wintrust Financial vs. KeyCorp | Wintrust Financial vs. Fifth Third Bancorp | Wintrust Financial vs. Citizens Financial Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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