Correlation Between Washington Trust and Trustmark
Can any of the company-specific risk be diversified away by investing in both Washington Trust and Trustmark 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 Trustmark 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 Trustmark, you can compare the effects of market volatilities on Washington Trust and Trustmark 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 Trustmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Trust and Trustmark.
Diversification Opportunities for Washington Trust and Trustmark
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Trustmark is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Washington Trust Bancorp and Trustmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustmark 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 Trustmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustmark has no effect on the direction of Washington Trust i.e., Washington Trust and Trustmark go up and down completely randomly.
Pair Corralation between Washington Trust and Trustmark
Given the investment horizon of 90 days Washington Trust is expected to generate 1.23 times less return on investment than Trustmark. In addition to that, Washington Trust is 1.33 times more volatile than Trustmark. It trades about 0.07 of its total potential returns per unit of risk. Trustmark is currently generating about 0.11 per unit of volatility. If you would invest 2,440 in Trustmark on August 31, 2024 and sell it today you would earn a total of 1,528 from holding Trustmark or generate 62.62% 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. Trustmark
Performance |
| Timeline |
| Washington Trust Bancorp |
| Trustmark |
Washington Trust and Trustmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Trust and Trustmark
The main advantage of trading using opposite Washington Trust and Trustmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Trust position performs unexpectedly, Trustmark 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 Trustmark will offset losses from the drop in Trustmark's long position.| Washington Trust vs. Univest Pennsylvania | Washington Trust vs. Waterstone Financial | Washington Trust vs. Mid Penn Bancorp | Washington Trust vs. ST Bancorp |
| Trustmark vs. Home Bancorp | Trustmark vs. First Business Financial | Trustmark vs. LINKBANCORP | Trustmark vs. Great Southern 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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