Correlation Between Washington Trust and Alpha Services
Can any of the company-specific risk be diversified away by investing in both Washington Trust and Alpha Services 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 Trust and Alpha Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Trust Bancorp and Alpha Services And, you can compare the effects of market volatilities on Washington Trust and Alpha Services 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 Trust with a short position of Alpha Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and Alpha Services.
Diversification Opportunities for Washington Trust and Alpha Services
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Washington and Alpha is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and Alpha Services And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Services And and Washington Trust 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 Trust Bancorp are associated (or correlated) with Alpha Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Services And has no effect on the direction of Washington Trust i.e., Washington Trust and Alpha Services go up and down completely randomly.
Pair Corralation between Washington Trust and Alpha Services
Given the investment horizon of 90 days Washington Trust Bancorp is expected to under-perform the Alpha Services. But the stock apears to be less risky and, when comparing its historical volatility, Washington Trust Bancorp is 1.23 times less risky than Alpha Services. The stock trades about -0.01 of its potential returns per unit of risk. The Alpha Services And is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Alpha Services And on October 14, 2024 and sell it today you would earn a total of 59.00 from holding Alpha Services And or generate 53.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 69.35% |
| Values | Daily Returns |
Washington Trust Bancorp vs. Alpha Services And
Performance |
| Timeline |
| Washington Trust Bancorp |
| Alpha Services And |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Washington Trust and Alpha Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and Alpha Services
The main advantage of trading using opposite Washington Trust and Alpha Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, Alpha Services 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 Alpha Services will offset losses from the drop in Alpha Services' long position.| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
| Alpha Services vs. Bankinter SA ADR | Alpha Services vs. CaixaBank SA | Alpha Services vs. First Horizon | Alpha Services vs. JAPAN POST BANK |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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