Correlation Between Rhinebeck Bancorp and WesBanco
Can any of the company-specific risk be diversified away by investing in both Rhinebeck Bancorp and WesBanco 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 Rhinebeck Bancorp and WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rhinebeck Bancorp and WesBanco, you can compare the effects of market volatilities on Rhinebeck Bancorp and WesBanco 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 Rhinebeck Bancorp with a short position of WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rhinebeck Bancorp and WesBanco.
Diversification Opportunities for Rhinebeck Bancorp and WesBanco
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rhinebeck and WesBanco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Rhinebeck Bancorp and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and Rhinebeck Bancorp 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 Rhinebeck Bancorp are associated (or correlated) with WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Rhinebeck Bancorp i.e., Rhinebeck Bancorp and WesBanco go up and down completely randomly.
Pair Corralation between Rhinebeck Bancorp and WesBanco
Given the investment horizon of 90 days Rhinebeck Bancorp is expected to generate 1.26 times less return on investment than WesBanco. In addition to that, Rhinebeck Bancorp is 1.02 times more volatile than WesBanco. It trades about 0.06 of its total potential returns per unit of risk. WesBanco is currently generating about 0.07 per unit of volatility. If you would invest 2,101 in WesBanco on August 31, 2024 and sell it today you would earn a total of 1,444 from holding WesBanco or generate 68.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rhinebeck Bancorp vs. WesBanco
Performance |
| Timeline |
| Rhinebeck Bancorp |
| WesBanco |
Rhinebeck Bancorp and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rhinebeck Bancorp and WesBanco
The main advantage of trading using opposite Rhinebeck Bancorp and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rhinebeck Bancorp position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco's long position.| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
| WesBanco vs. Union Bankshares | WesBanco vs. Home Bancorp | WesBanco vs. Rhinebeck Bancorp | WesBanco vs. LINKBANCORP |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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