Correlation Between William Blair and Regional Bank
Can any of the company-specific risk be diversified away by investing in both William Blair and Regional Bank 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 William Blair and Regional Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair Small and Regional Bank Fund, you can compare the effects of market volatilities on William Blair and Regional Bank 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 William Blair with a short position of Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Regional Bank.
Diversification Opportunities for William Blair and Regional Bank
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between William and Regional is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Small and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank and William Blair 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 William Blair Small are associated (or correlated) with Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of William Blair i.e., William Blair and Regional Bank go up and down completely randomly.
Pair Corralation between William Blair and Regional Bank
Assuming the 90 days horizon William Blair is expected to generate 1.09 times less return on investment than Regional Bank. But when comparing it to its historical volatility, William Blair Small is 1.44 times less risky than Regional Bank. It trades about 0.15 of its potential returns per unit of risk. Regional Bank Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,678 in Regional Bank Fund on October 28, 2024 and sell it today you would earn a total of 74.00 from holding Regional Bank Fund or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair Small vs. Regional Bank Fund
Performance |
| Timeline |
| William Blair Small |
| Regional Bank |
William Blair and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and Regional Bank
The main advantage of trading using opposite William Blair and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank's long position.| William Blair vs. Goldman Sachs Technology | William Blair vs. Icon Information Technology | William Blair vs. Invesco Technology Fund | William Blair vs. Columbia Global Technology |
| Regional Bank vs. Siit High Yield | Regional Bank vs. Americafirst Monthly Risk On | Regional Bank vs. Artisan High Income | Regional Bank vs. Needham Aggressive Growth |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |