Correlation Between Washington Federal and Valley National
Can any of the company-specific risk be diversified away by investing in both Washington Federal and Valley National 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 Valley National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and Valley National Bancorp, you can compare the effects of market volatilities on Washington Federal and Valley National 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 Valley National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and Valley National.
Diversification Opportunities for Washington Federal and Valley National
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Washington and Valley is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and Valley National Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valley National 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 Valley National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valley National Bancorp has no effect on the direction of Washington Federal i.e., Washington Federal and Valley National go up and down completely randomly.
Pair Corralation between Washington Federal and Valley National
Assuming the 90 days horizon Washington Federal is expected to generate 1.97 times less return on investment than Valley National. In addition to that, Washington Federal is 1.13 times more volatile than Valley National Bancorp. It trades about 0.05 of its total potential returns per unit of risk. Valley National Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 1,859 in Valley National Bancorp on December 11, 2024 and sell it today you would earn a total of 601.00 from holding Valley National Bancorp or generate 32.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. Valley National Bancorp
Performance |
| Timeline |
| Washington Federal |
| Valley National Bancorp |
Washington Federal and Valley National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and Valley National
The main advantage of trading using opposite Washington Federal and Valley National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, Valley National 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 Valley National will offset losses from the drop in Valley National's long position.| Washington Federal vs. Wintrust Financial Corp | ||
| Washington Federal vs. WesBanco | ||
| Washington Federal vs. Pinnacle Financial Partners | ||
| Washington Federal vs. Aquagold International |
| Valley National vs. Valley National Bancorp | ||
| Valley National vs. Washington Federal | ||
| Valley National vs. US Bancorp PERP | ||
| Valley National vs. US 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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 | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |