Correlation Between Wayne Savings and Woodlands Financial
Can any of the company-specific risk be diversified away by investing in both Wayne Savings and Woodlands Financial 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 Woodlands Financial 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 Woodlands Financial Services, you can compare the effects of market volatilities on Wayne Savings and Woodlands Financial 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 Woodlands Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayne Savings and Woodlands Financial.
Diversification Opportunities for Wayne Savings and Woodlands Financial
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wayne and Woodlands is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wayne Savings Bancshares and Woodlands Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodlands Financial 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 Woodlands Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodlands Financial has no effect on the direction of Wayne Savings i.e., Wayne Savings and Woodlands Financial go up and down completely randomly.
Pair Corralation between Wayne Savings and Woodlands Financial
Given the investment horizon of 90 days Wayne Savings Bancshares is expected to generate 0.3 times more return on investment than Woodlands Financial. However, Wayne Savings Bancshares is 3.38 times less risky than Woodlands Financial. It trades about 0.14 of its potential returns per unit of risk. Woodlands Financial Services is currently generating about 0.01 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 | Insignificant |
| Accuracy | 10.91% |
| Values | Daily Returns |
Wayne Savings Bancshares vs. Woodlands Financial Services
Performance |
| Timeline |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Woodlands Financial |
Wayne Savings and Woodlands Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayne Savings and Woodlands Financial
The main advantage of trading using opposite Wayne Savings and Woodlands Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayne Savings position performs unexpectedly, Woodlands Financial 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 Woodlands Financial will offset losses from the drop in Woodlands Financial'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 |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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