Correlation Between Washington Federal and Cornerstone Financial
Can any of the company-specific risk be diversified away by investing in both Washington Federal and Cornerstone 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 Washington Federal and Cornerstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Cornerstone Financial, you can compare the effects of market volatilities on Washington Federal and Cornerstone 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 Washington Federal with a short position of Cornerstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Cornerstone Financial.
Diversification Opportunities for Washington Federal and Cornerstone Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Washington and Cornerstone is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Cornerstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone 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 Cornerstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Financial has no effect on the direction of Washington Federal i.e., Washington Federal and Cornerstone Financial go up and down completely randomly.
Pair Corralation between Washington Federal and Cornerstone Financial
If you would invest 832.00 in Cornerstone Financial on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Cornerstone Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Washington Federal vs. Cornerstone Financial
Performance |
| Timeline |
| Washington Federal |
| Cornerstone Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Washington Federal and Cornerstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Cornerstone Financial
The main advantage of trading using opposite Washington Federal and Cornerstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, Cornerstone 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 Cornerstone Financial will offset losses from the drop in Cornerstone Financial's long position.| Washington Federal vs. KeyCorp | Washington Federal vs. KeyCorp | Washington Federal vs. Fifth Third Bancorp | Washington Federal vs. Citizens Financial Group |
| Cornerstone Financial vs. Northfield Bancorp | Cornerstone Financial vs. Sierra Bancorp | Cornerstone Financial vs. Bogota Financial Corp | Cornerstone Financial vs. First 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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