Correlation Between Washington Trust and Banc Of
Can any of the company-specific risk be diversified away by investing in both Washington Trust and Banc Of 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 Banc Of 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 Banc of California,, you can compare the effects of market volatilities on Washington Trust and Banc Of 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 Banc Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and Banc Of.
Diversification Opportunities for Washington Trust and Banc Of
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Banc is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and Banc of California, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California, 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 Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California, has no effect on the direction of Washington Trust i.e., Washington Trust and Banc Of go up and down completely randomly.
Pair Corralation between Washington Trust and Banc Of
Given the investment horizon of 90 days Washington Trust is expected to generate 1.6 times less return on investment than Banc Of. In addition to that, Washington Trust is 1.32 times more volatile than Banc of California,. It trades about 0.09 of its total potential returns per unit of risk. Banc of California, is currently generating about 0.2 per unit of volatility. If you would invest 1,584 in Banc of California, on August 28, 2024 and sell it today you would earn a total of 193.00 from holding Banc of California, or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Trust Bancorp vs. Banc of California,
Performance |
| Timeline |
| Washington Trust Bancorp |
| Banc of California, |
Washington Trust and Banc Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and Banc Of
The main advantage of trading using opposite Washington Trust and Banc Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, Banc Of 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 Banc Of will offset losses from the drop in Banc Of's long position.| Washington Trust vs. Fifth Third Bancorp | Washington Trust vs. Huntington Bancshares Incorporated | Washington Trust vs. MT Bank |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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