Correlation Between Tri-County Financial and Wayne Savings
Can any of the company-specific risk be diversified away by investing in both Tri-County 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 Tri-County 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 Tri County Financial Group and Wayne Savings Bancshares, you can compare the effects of market volatilities on Tri-County 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 Tri-County Financial with a short position of Wayne Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri-County Financial and Wayne Savings.
Diversification Opportunities for Tri-County Financial and Wayne Savings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tri-County and Wayne is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tri County Financial Group 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 Tri-County 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 Tri County Financial Group 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 Tri-County Financial i.e., Tri-County Financial and Wayne Savings go up and down completely randomly.
Pair Corralation between Tri-County Financial and Wayne Savings
If you would invest 4,225 in Tri County Financial Group on August 29, 2024 and sell it today you would earn a total of 110.00 from holding Tri County Financial Group or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Tri County Financial Group vs. Wayne Savings Bancshares
Performance |
| Timeline |
| Tri County Financial |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tri-County Financial and Wayne Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tri-County Financial and Wayne Savings
The main advantage of trading using opposite Tri-County Financial and Wayne Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tri-County 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.The idea behind Tri County Financial Group and Wayne Savings Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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