Correlation Between Wayne Savings and FNB
Can any of the company-specific risk be diversified away by investing in both Wayne Savings and FNB 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 Wayne Savings and FNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayne Savings Bancshares and FNB Inc, you can compare the effects of market volatilities on Wayne Savings and FNB 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 Wayne Savings with a short position of FNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayne Savings and FNB.
Diversification Opportunities for Wayne Savings and FNB
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wayne and FNB is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Wayne Savings Bancshares and FNB Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNB Inc and Wayne Savings 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 Wayne Savings Bancshares are associated (or correlated) with FNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNB Inc has no effect on the direction of Wayne Savings i.e., Wayne Savings and FNB go up and down completely randomly.
Pair Corralation between Wayne Savings and FNB
Given the investment horizon of 90 days Wayne Savings Bancshares is expected to generate 0.26 times more return on investment than FNB. However, Wayne Savings Bancshares is 3.79 times less risky than FNB. It trades about 0.14 of its potential returns per unit of risk. FNB Inc is currently generating about 0.03 per unit of risk. If you would invest 2,610 in Wayne Savings Bancshares on August 29, 2024 and sell it today you would earn a total of 231.00 from holding Wayne Savings Bancshares or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 12.99% |
| Values | Daily Returns |
Wayne Savings Bancshares vs. FNB Inc
Performance |
| Timeline |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FNB Inc |
Wayne Savings and FNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayne Savings and FNB
The main advantage of trading using opposite Wayne Savings and FNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayne Savings position performs unexpectedly, FNB 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 FNB will offset losses from the drop in FNB's long position.| Wayne Savings vs. First IC | Wayne Savings vs. CCFNB Bancorp | Wayne Savings vs. Glen Burnie Bancorp | Wayne Savings vs. Main Street Financial |
| FNB vs. Century Financial Corp | FNB vs. Apollo Bancorp | FNB vs. Commercial National Financial | FNB vs. Eastern Michigan Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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