Correlation Between Western Alliance and Cohen
Can any of the company-specific risk be diversified away by investing in both Western Alliance and Cohen 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 Western Alliance and Cohen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Alliance Bancorporation and Cohen Company, you can compare the effects of market volatilities on Western Alliance and Cohen 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 Western Alliance with a short position of Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alliance and Cohen.
Diversification Opportunities for Western Alliance and Cohen
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Cohen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company and Western Alliance 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 Western Alliance Bancorporation are associated (or correlated) with Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of Western Alliance i.e., Western Alliance and Cohen go up and down completely randomly.
Pair Corralation between Western Alliance and Cohen
Considering the 90-day investment horizon Western Alliance Bancorporation is expected to under-perform the Cohen. But the stock apears to be less risky and, when comparing its historical volatility, Western Alliance Bancorporation is 2.24 times less risky than Cohen. The stock trades about -0.03 of its potential returns per unit of risk. The Cohen Company is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Cohen Company on September 19, 2024 and sell it today you would earn a total of 112.00 from holding Cohen Company or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Alliance Bancorp. vs. Cohen Company
Performance |
| Timeline |
| Western Alliance Ban |
| Cohen Company |
Western Alliance and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Alliance and Cohen
The main advantage of trading using opposite Western Alliance and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Alliance position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen's long position.| Western Alliance vs. Zions Bancorporation | Western Alliance vs. KeyCorp | Western Alliance vs. First Horizon National | Western Alliance vs. Comerica |
| Cohen vs. Banco Bradesco SA | Cohen vs. Itau Unibanco Banco | Cohen vs. Banco Santander Brasil | Cohen vs. Western Alliance Bancorporation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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