Correlation Between Old National and Washington Federal
Can any of the company-specific risk be diversified away by investing in both Old National and Washington Federal 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 Washington Federal 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 Washington Federal, you can compare the effects of market volatilities on Old National and Washington Federal 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 Washington Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old National and Washington Federal.
Diversification Opportunities for Old National and Washington Federal
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Old and Washington is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Old National Bancorp and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal 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 Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of Old National i.e., Old National and Washington Federal go up and down completely randomly.
Pair Corralation between Old National and Washington Federal
Assuming the 90 days horizon Old National Bancorp is expected to generate 0.76 times more return on investment than Washington Federal. However, Old National Bancorp is 1.31 times less risky than Washington Federal. It trades about 0.15 of its potential returns per unit of risk. Washington Federal is currently generating about -0.17 per unit of risk. If you would invest 2,490 in Old National Bancorp on August 28, 2024 and sell it today you would earn a total of 71.00 from holding Old National Bancorp or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old National Bancorp vs. Washington Federal
Performance |
| Timeline |
| Old National Bancorp |
| Washington Federal |
Old National and Washington Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old National and Washington Federal
The main advantage of trading using opposite Old National and Washington Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old National position performs unexpectedly, Washington Federal 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 Washington Federal will offset losses from the drop in Washington Federal's long position.| Old National vs. Old National Bancorp | Old National vs. Pinnacle Financial Partners | Old National vs. Heartland Financial USA | Old National vs. OceanFirst Financial Corp |
| Washington Federal vs. Capital One Financial | Washington Federal vs. Capital One Financial | Washington Federal vs. Bank of America |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |