Correlation Between Westbury Bancorp and First Capital
Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp 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 Westbury Bancorp and First Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westbury Bancorp and First Capital, you can compare the effects of market volatilities on Westbury Bancorp 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 Westbury Bancorp with a short position of First Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and First Capital.
Diversification Opportunities for Westbury Bancorp and First Capital
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westbury and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and First Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital 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 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 Westbury Bancorp i.e., Westbury Bancorp and First Capital go up and down completely randomly.
Pair Corralation between Westbury Bancorp and First Capital
If you would invest 2,190 in First Capital on August 27, 2024 and sell it today you would earn a total of 1,088 from holding First Capital or generate 49.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.26% |
| Values | Daily Returns |
Westbury Bancorp vs. First Capital
Performance |
| Timeline |
| Westbury Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Capital |
Westbury Bancorp and First Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westbury Bancorp and First Capital
The main advantage of trading using opposite Westbury Bancorp and First Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westbury Bancorp 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.| Westbury Bancorp vs. Home Federal Bancorp | Westbury Bancorp vs. First Northwest Bancorp | Westbury Bancorp vs. First Community | Westbury Bancorp vs. Oak Valley Bancorp |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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