Correlation Between Washington Trust and First Capital
Can any of the company-specific risk be diversified away by investing in both Washington Trust and First Capital 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 First Capital 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 First Capital, you can compare the effects of market volatilities on Washington Trust and First Capital 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 First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and First Capital.
Diversification Opportunities for Washington Trust and First Capital
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Washington and First is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital has no effect on the direction of Washington Trust i.e., Washington Trust and First Capital go up and down completely randomly.
Pair Corralation between Washington Trust and First Capital
Given the investment horizon of 90 days Washington Trust is expected to generate 35.84 times less return on investment than First Capital. In addition to that, Washington Trust is 1.12 times more volatile than First Capital. It trades about 0.0 of its total potential returns per unit of risk. First Capital is currently generating about 0.03 per unit of volatility. If you would invest 2,557 in First Capital on October 29, 2024 and sell it today you would earn a total of 591.00 from holding First Capital or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
Washington Trust Bancorp vs. First Capital
Performance |
| Timeline |
| Washington Trust Bancorp |
| First Capital |
Washington Trust and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and First Capital
The main advantage of trading using opposite Washington Trust and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, First Capital 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 First Capital will offset losses from the drop in First Capital's long position.| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
| First Capital vs. Home Federal Bancorp | First Capital vs. First Financial Northwest | First Capital vs. First Northwest Bancorp | First Capital vs. Community West Bancshares |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |