Correlation Between Washington Federal and Orange County
Can any of the company-specific risk be diversified away by investing in both Washington Federal and Orange County 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 Washington Federal and Orange County into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Orange County Bancorp, you can compare the effects of market volatilities on Washington Federal and Orange County 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 Washington Federal with a short position of Orange County. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Orange County.
Diversification Opportunities for Washington Federal and Orange County
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Orange is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Orange County Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange County Bancorp and Washington Federal 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 Washington Federal are associated (or correlated) with Orange County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange County Bancorp has no effect on the direction of Washington Federal i.e., Washington Federal and Orange County go up and down completely randomly.
Pair Corralation between Washington Federal and Orange County
Given the investment horizon of 90 days Washington Federal is expected to under-perform the Orange County. But the stock apears to be less risky and, when comparing its historical volatility, Washington Federal is 1.27 times less risky than Orange County. The stock trades about -0.07 of its potential returns per unit of risk. The Orange County Bancorp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,894 in Orange County Bancorp on November 2, 2024 and sell it today you would lose (295.00) from holding Orange County Bancorp or give up 10.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. Orange County Bancorp
Performance |
| Timeline |
| Washington Federal |
| Orange County Bancorp |
Washington Federal and Orange County Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Orange County
The main advantage of trading using opposite Washington Federal and Orange County positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, Orange County 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 Orange County will offset losses from the drop in Orange County's long position.| Washington Federal vs. Finward Bancorp | Washington Federal vs. Great Southern Bancorp | Washington Federal vs. First Mid Illinois | Washington Federal vs. Franklin Financial Services |
| Orange County vs. Southern States Bancshares | Orange County vs. US Century Bank | Orange County vs. Third Coast Bancshares | Orange County vs. Esquire Financial Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |