Correlation Between Washington Federal and Trustmark
Can any of the company-specific risk be diversified away by investing in both Washington Federal and Trustmark 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 Trustmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Trustmark, you can compare the effects of market volatilities on Washington Federal and Trustmark 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 Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Trustmark.
Diversification Opportunities for Washington Federal and Trustmark
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and Trustmark is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark 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 Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of Washington Federal i.e., Washington Federal and Trustmark go up and down completely randomly.
Pair Corralation between Washington Federal and Trustmark
Given the investment horizon of 90 days Washington Federal is expected to generate 2.28 times less return on investment than Trustmark. In addition to that, Washington Federal is 1.09 times more volatile than Trustmark. It trades about 0.03 of its total potential returns per unit of risk. Trustmark is currently generating about 0.07 per unit of volatility. If you would invest 2,005 in Trustmark on January 18, 2025 and sell it today you would earn a total of 1,270 from holding Trustmark or generate 63.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. Trustmark
Performance |
| Timeline |
| Washington Federal |
| Trustmark |
Washington Federal and Trustmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Trustmark
The main advantage of trading using opposite Washington Federal and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.| Washington Federal vs. Community West Bancshares | Washington Federal vs. First Financial Northwest | Washington Federal vs. Oak Valley Bancorp | Washington Federal vs. Home Federal Bancorp |
| Trustmark vs. Home Bancorp | Trustmark vs. First Business Financial | Trustmark vs. LINKBANCORP | Trustmark vs. Great Southern Bancorp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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