Correlation Between Sound Financial and Wayne Savings
Can any of the company-specific risk be diversified away by investing in both Sound Financial and Wayne Savings 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 Sound Financial and Wayne Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Financial Bancorp and Wayne Savings Bancshares, you can compare the effects of market volatilities on Sound Financial and Wayne Savings 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 Sound Financial with a short position of Wayne Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Financial and Wayne Savings.
Diversification Opportunities for Sound Financial and Wayne Savings
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sound and Wayne is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sound Financial Bancorp and Wayne Savings Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayne Savings Bancshares and Sound 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 Sound Financial Bancorp are associated (or correlated) with Wayne Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayne Savings Bancshares has no effect on the direction of Sound Financial i.e., Sound Financial and Wayne Savings go up and down completely randomly.
Pair Corralation between Sound Financial and Wayne Savings
If you would invest 3,962 in Sound Financial Bancorp on August 28, 2024 and sell it today you would earn a total of 1,395 from holding Sound Financial Bancorp or generate 35.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.88% |
| Values | Daily Returns |
Sound Financial Bancorp vs. Wayne Savings Bancshares
Performance |
| Timeline |
| Sound Financial Bancorp |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sound Financial and Wayne Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Financial and Wayne Savings
The main advantage of trading using opposite Sound Financial and Wayne Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Financial position performs unexpectedly, Wayne Savings 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 Wayne Savings will offset losses from the drop in Wayne Savings' long position.| Sound Financial vs. Finward Bancorp | Sound Financial vs. Franklin Financial Services | Sound Financial vs. Community West Bancshares | Sound Financial vs. Home Federal Bancorp |
| Wayne Savings vs. First IC | Wayne Savings vs. CCFNB Bancorp | Wayne Savings vs. Glen Burnie Bancorp | Wayne Savings vs. Main Street 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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