Correlation Between Pinnacle Financial and WSFS Financial
Can any of the company-specific risk be diversified away by investing in both Pinnacle Financial 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 Pinnacle Financial and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Financial Partners and WSFS Financial, you can compare the effects of market volatilities on Pinnacle Financial 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 Pinnacle Financial with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Financial and WSFS Financial.
Diversification Opportunities for Pinnacle Financial and WSFS Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pinnacle and WSFS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Financial Partners and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and Pinnacle Financial 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 Pinnacle Financial Partners 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 Pinnacle Financial i.e., Pinnacle Financial and WSFS Financial go up and down completely randomly.
Pair Corralation between Pinnacle Financial and WSFS Financial
Given the investment horizon of 90 days Pinnacle Financial Partners is expected to generate 1.0 times more return on investment than WSFS Financial. However, Pinnacle Financial Partners is 1.0 times less risky than WSFS Financial. It trades about 0.06 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.03 per unit of risk. If you would invest 7,300 in Pinnacle Financial Partners on November 9, 2024 and sell it today you would earn a total of 5,315 from holding Pinnacle Financial Partners or generate 72.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pinnacle Financial Partners vs. WSFS Financial
Performance |
| Timeline |
| Pinnacle Financial |
| WSFS Financial |
Pinnacle Financial and WSFS Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Financial and WSFS Financial
The main advantage of trading using opposite Pinnacle Financial and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Financial 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.| Pinnacle Financial vs. Wintrust Financial | Pinnacle Financial vs. Renasant | Pinnacle Financial vs. Texas Capital Bancshares | Pinnacle Financial vs. Home BancShares |
| WSFS Financial vs. Western New England | WSFS Financial vs. Great Southern Bancorp | WSFS Financial vs. First Financial | WSFS Financial vs. Heritage Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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