Correlation Between WCF Bancorp and Cadence Bank
Can any of the company-specific risk be diversified away by investing in both WCF Bancorp and Cadence 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 WCF Bancorp and Cadence Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WCF Bancorp and Cadence Bank, you can compare the effects of market volatilities on WCF Bancorp and Cadence 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 WCF Bancorp with a short position of Cadence Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WCF Bancorp and Cadence Bank.
Diversification Opportunities for WCF Bancorp and Cadence Bank
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WCF and Cadence is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding WCF Bancorp and Cadence Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Bank and WCF 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 WCF Bancorp are associated (or correlated) with Cadence Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Bank has no effect on the direction of WCF Bancorp i.e., WCF Bancorp and Cadence Bank go up and down completely randomly.
Pair Corralation between WCF Bancorp and Cadence Bank
If you would invest 2,096 in Cadence Bank on September 1, 2024 and sell it today you would earn a total of 9.00 from holding Cadence Bank or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
WCF Bancorp vs. Cadence Bank
Performance |
| Timeline |
| WCF Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cadence Bank |
WCF Bancorp and Cadence Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WCF Bancorp and Cadence Bank
The main advantage of trading using opposite WCF Bancorp and Cadence Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WCF Bancorp position performs unexpectedly, Cadence 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 Cadence Bank will offset losses from the drop in Cadence Bank's long position.| WCF Bancorp vs. CCSB Financial Corp | WCF Bancorp vs. Delhi Bank Corp | WCF Bancorp vs. Bank of Utica | WCF Bancorp vs. First Community Financial |
| Cadence Bank vs. Bank of Hawaii | Cadence Bank vs. Associated Banc Corp | Cadence Bank vs. Citizens Financial Group | Cadence Bank vs. CullenFrost Bankers |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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