Correlation Between WCF Bancorp and Community Investors
Can any of the company-specific risk be diversified away by investing in both WCF Bancorp and Community Investors 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 Community Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WCF Bancorp and Community Investors Bancorp, you can compare the effects of market volatilities on WCF Bancorp and Community Investors 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 Community Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of WCF Bancorp and Community Investors.
Diversification Opportunities for WCF Bancorp and Community Investors
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WCF and Community is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding WCF Bancorp and Community Investors Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Investors 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 Community Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Investors has no effect on the direction of WCF Bancorp i.e., WCF Bancorp and Community Investors go up and down completely randomly.
Pair Corralation between WCF Bancorp and Community Investors
If you would invest 1,700 in Community Investors Bancorp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Community Investors Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WCF Bancorp vs. Community Investors Bancorp
Performance |
| Timeline |
| WCF Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Community Investors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WCF Bancorp and Community Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WCF Bancorp and Community Investors
The main advantage of trading using opposite WCF Bancorp and Community Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WCF Bancorp position performs unexpectedly, Community Investors 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 Community Investors will offset losses from the drop in Community Investors' 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 |
| Community Investors vs. CIB Marine Bancshares | Community Investors vs. United Bancorporation of | Community Investors vs. U I Financial | Community Investors vs. CoastalSouth Bancshares |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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