Correlation Between Woodlands Financial and Wayne Savings
Can any of the company-specific risk be diversified away by investing in both Woodlands Financial and Wayne Savings 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 Woodlands Financial and Wayne Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodlands Financial Services and Wayne Savings Bancshares, you can compare the effects of market volatilities on Woodlands Financial and Wayne Savings 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 Woodlands Financial with a short position of Wayne Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodlands Financial and Wayne Savings.
Diversification Opportunities for Woodlands Financial and Wayne Savings
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Woodlands and Wayne is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Woodlands Financial Services and Wayne Savings Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayne Savings Bancshares and Woodlands Financial 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 Woodlands Financial Services are associated (or correlated) with Wayne Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayne Savings Bancshares has no effect on the direction of Woodlands Financial i.e., Woodlands Financial and Wayne Savings go up and down completely randomly.
Pair Corralation between Woodlands Financial and Wayne Savings
Given the investment horizon of 90 days Woodlands Financial is expected to generate 4.57 times less return on investment than Wayne Savings. In addition to that, Woodlands Financial is 3.38 times more volatile than Wayne Savings Bancshares. It trades about 0.01 of its total potential returns per unit of risk. Wayne Savings Bancshares is currently generating about 0.14 per unit of volatility. If you would invest 2,610 in Wayne Savings Bancshares on August 29, 2024 and sell it today you would earn a total of 231.00 from holding Wayne Savings Bancshares or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 10.91% |
| Values | Daily Returns |
Woodlands Financial Services vs. Wayne Savings Bancshares
Performance |
| Timeline |
| Woodlands Financial |
| Wayne Savings Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Woodlands Financial and Wayne Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodlands Financial and Wayne Savings
The main advantage of trading using opposite Woodlands Financial and Wayne Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodlands Financial position performs unexpectedly, Wayne Savings 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 Wayne Savings will offset losses from the drop in Wayne Savings' long position.| Woodlands Financial vs. Israel Discount Bank | Woodlands Financial vs. Baraboo Bancorporation | Woodlands Financial vs. Danske Bank AS | Woodlands Financial vs. Jyske Bank AS |
| Wayne Savings vs. First IC | Wayne Savings vs. CCFNB Bancorp | Wayne Savings vs. Glen Burnie Bancorp | Wayne Savings vs. Main Street Financial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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