Correlation Between Westbury Bancorp and ESSA Bancorp
Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp and ESSA Bancorp 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 Westbury Bancorp and ESSA Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westbury Bancorp and ESSA Bancorp, you can compare the effects of market volatilities on Westbury Bancorp and ESSA Bancorp 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 Westbury Bancorp with a short position of ESSA Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and ESSA Bancorp.
Diversification Opportunities for Westbury Bancorp and ESSA Bancorp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westbury and ESSA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and ESSA Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESSA Bancorp and Westbury Bancorp 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 Westbury Bancorp are associated (or correlated) with ESSA Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESSA Bancorp has no effect on the direction of Westbury Bancorp i.e., Westbury Bancorp and ESSA Bancorp go up and down completely randomly.
Pair Corralation between Westbury Bancorp and ESSA Bancorp
If you would invest 1,929 in ESSA Bancorp on August 30, 2024 and sell it today you would earn a total of 119.00 from holding ESSA Bancorp or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Westbury Bancorp vs. ESSA Bancorp
Performance |
| Timeline |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ESSA Bancorp |
Westbury Bancorp and ESSA Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westbury Bancorp and ESSA Bancorp
The main advantage of trading using opposite Westbury Bancorp and ESSA Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westbury Bancorp position performs unexpectedly, ESSA Bancorp 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 ESSA Bancorp will offset losses from the drop in ESSA Bancorp's long position.| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
| ESSA Bancorp vs. Community West Bancshares | ESSA Bancorp vs. First Northwest Bancorp | ESSA Bancorp vs. First Community | ESSA Bancorp vs. Oak Valley 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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