Correlation Between Washington Federal and South Plains
Can any of the company-specific risk be diversified away by investing in both Washington Federal and South Plains 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 South Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and South Plains Financial, you can compare the effects of market volatilities on Washington Federal and South Plains 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 South Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and South Plains.
Diversification Opportunities for Washington Federal and South Plains
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Washington and South is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and South Plains Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Plains Financial 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 South Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Plains Financial has no effect on the direction of Washington Federal i.e., Washington Federal and South Plains go up and down completely randomly.
Pair Corralation between Washington Federal and South Plains
Given the investment horizon of 90 days Washington Federal is expected to under-perform the South Plains. In addition to that, Washington Federal is 1.03 times more volatile than South Plains Financial. It trades about -0.17 of its total potential returns per unit of risk. South Plains Financial is currently generating about 0.14 per unit of volatility. If you would invest 3,410 in South Plains Financial on November 3, 2024 and sell it today you would earn a total of 183.00 from holding South Plains Financial or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. South Plains Financial
Performance |
| Timeline |
| Washington Federal |
| South Plains Financial |
Washington Federal and South Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and South Plains
The main advantage of trading using opposite Washington Federal and South Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, South Plains 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 South Plains will offset losses from the drop in South Plains' long position.| Washington Federal vs. US Bancorp | Washington Federal vs. Truist Financial Corp | Washington Federal vs. Fifth Third Bancorp | Washington Federal vs. KeyCorp |
| South Plains vs. Sound Financial Bancorp | South Plains vs. Finward Bancorp | South Plains vs. Franklin Financial Services | South Plains vs. Community West 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |