Correlation Between United Bankshares and WesBanco
Can any of the company-specific risk be diversified away by investing in both United Bankshares 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 United Bankshares and WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankshares and WesBanco, you can compare the effects of market volatilities on United Bankshares 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 United Bankshares with a short position of WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankshares and WesBanco.
Diversification Opportunities for United Bankshares and WesBanco
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and WesBanco is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding United Bankshares and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco and United Bankshares 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 United Bankshares 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 United Bankshares i.e., United Bankshares and WesBanco go up and down completely randomly.
Pair Corralation between United Bankshares and WesBanco
Given the investment horizon of 90 days United Bankshares is expected to generate 1.88 times less return on investment than WesBanco. In addition to that, United Bankshares is 1.48 times more volatile than WesBanco. It trades about 0.01 of its total potential returns per unit of risk. WesBanco is currently generating about 0.02 per unit of volatility. If you would invest 2,238 in WesBanco on October 14, 2024 and sell it today you would earn a total of 281.00 from holding WesBanco or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bankshares vs. WesBanco
Performance |
| Timeline |
| United Bankshares |
| WesBanco |
United Bankshares and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankshares and WesBanco
The main advantage of trading using opposite United Bankshares and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankshares 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.| United Bankshares vs. Peoples Bancorp | United Bankshares vs. Eagle Bancorp | United Bankshares vs. Northrim BanCorp | United Bankshares vs. Pacific Premier Bancorp |
| WesBanco vs. Simon Property Group | WesBanco vs. Sonida Senior Living | WesBanco vs. Franklin Credit Management | WesBanco vs. Ameriprise 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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