Correlation Between TriCo Bancshares and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both TriCo Bancshares 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 TriCo Bancshares and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriCo Bancshares and Wintrust Financial, you can compare the effects of market volatilities on TriCo Bancshares 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 TriCo Bancshares with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriCo Bancshares and Wintrust Financial.
Diversification Opportunities for TriCo Bancshares and Wintrust Financial
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TriCo and Wintrust is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding TriCo Bancshares and Wintrust Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial and TriCo Bancshares 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 TriCo Bancshares 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 has no effect on the direction of TriCo Bancshares i.e., TriCo Bancshares and Wintrust Financial go up and down completely randomly.
Pair Corralation between TriCo Bancshares and Wintrust Financial
Given the investment horizon of 90 days TriCo Bancshares is expected to generate 2.77 times less return on investment than Wintrust Financial. In addition to that, TriCo Bancshares is 1.07 times more volatile than Wintrust Financial. It trades about 0.06 of its total potential returns per unit of risk. Wintrust Financial is currently generating about 0.18 per unit of volatility. If you would invest 10,692 in Wintrust Financial on August 29, 2024 and sell it today you would earn a total of 3,097 from holding Wintrust Financial or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TriCo Bancshares vs. Wintrust Financial
Performance |
| Timeline |
| TriCo Bancshares |
| Wintrust Financial |
TriCo Bancshares and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriCo Bancshares and Wintrust Financial
The main advantage of trading using opposite TriCo Bancshares and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriCo Bancshares 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.| TriCo Bancshares vs. First Northwest Bancorp | TriCo Bancshares vs. Community West Bancshares | TriCo Bancshares vs. First Financial Northwest | TriCo Bancshares vs. Great Southern Bancorp |
| Wintrust Financial vs. Home Federal Bancorp | Wintrust Financial vs. First Northwest Bancorp | Wintrust Financial vs. First Financial Northwest | Wintrust Financial vs. CF Bankshares |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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