Correlation Between Westamerica Bancorporation and John Marshall
Can any of the company-specific risk be diversified away by investing in both Westamerica Bancorporation and John Marshall 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 Westamerica Bancorporation and John Marshall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westamerica Bancorporation and John Marshall Bancorp, you can compare the effects of market volatilities on Westamerica Bancorporation and John Marshall 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 Westamerica Bancorporation with a short position of John Marshall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westamerica Bancorporation and John Marshall.
Diversification Opportunities for Westamerica Bancorporation and John Marshall
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westamerica and John is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Westamerica Bancorp. and John Marshall Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Marshall Bancorp and Westamerica Bancorporation 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 Westamerica Bancorporation are associated (or correlated) with John Marshall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Marshall Bancorp has no effect on the direction of Westamerica Bancorporation i.e., Westamerica Bancorporation and John Marshall go up and down completely randomly.
Pair Corralation between Westamerica Bancorporation and John Marshall
Given the investment horizon of 90 days Westamerica Bancorporation is expected to generate 1.53 times less return on investment than John Marshall. But when comparing it to its historical volatility, Westamerica Bancorporation is 1.48 times less risky than John Marshall. It trades about 0.07 of its potential returns per unit of risk. John Marshall Bancorp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,727 in John Marshall Bancorp on September 1, 2024 and sell it today you would earn a total of 582.00 from holding John Marshall Bancorp or generate 33.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westamerica Bancorp. vs. John Marshall Bancorp
Performance |
| Timeline |
| Westamerica Bancorporation |
| John Marshall Bancorp |
Westamerica Bancorporation and John Marshall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westamerica Bancorporation and John Marshall
The main advantage of trading using opposite Westamerica Bancorporation and John Marshall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westamerica Bancorporation position performs unexpectedly, John Marshall 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 John Marshall will offset losses from the drop in John Marshall's long position.| Westamerica Bancorporation vs. Heritage Commerce Corp | Westamerica Bancorporation vs. Heritage Financial | Westamerica Bancorporation vs. Penns Woods Bancorp | Westamerica Bancorporation vs. 1st Source |
| John Marshall vs. Home Federal Bancorp | John Marshall vs. Magyar Bancorp | John Marshall vs. ChoiceOne Financial Services | John Marshall vs. Affinity Bancshares |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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