Correlation Between Virginia National and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Virginia National 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 Virginia National and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virginia National Bankshares and Wintrust Financial Corp, you can compare the effects of market volatilities on Virginia National 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 Virginia National with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virginia National and Wintrust Financial.
Diversification Opportunities for Virginia National and Wintrust Financial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virginia and Wintrust is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp and Virginia National 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 Virginia National Bankshares 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 Corp has no effect on the direction of Virginia National i.e., Virginia National and Wintrust Financial go up and down completely randomly.
Pair Corralation between Virginia National and Wintrust Financial
Given the investment horizon of 90 days Virginia National Bankshares is expected to generate 8.77 times more return on investment than Wintrust Financial. However, Virginia National is 8.77 times more volatile than Wintrust Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.18 per unit of risk. If you would invest 3,967 in Virginia National Bankshares on September 1, 2024 and sell it today you would earn a total of 115.00 from holding Virginia National Bankshares or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virginia National Bankshares vs. Wintrust Financial Corp
Performance |
| Timeline |
| Virginia National |
| Wintrust Financial Corp |
Virginia National and Wintrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virginia National and Wintrust Financial
The main advantage of trading using opposite Virginia National and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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.| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley Bancorp |
| Wintrust Financial vs. KeyCorp | Wintrust Financial vs. KeyCorp | Wintrust Financial vs. Fifth Third Bancorp | Wintrust Financial vs. Citizens Financial Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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