Correlation Between Wells Fargo and Ohio Valley
Can any of the company-specific risk be diversified away by investing in both Wells Fargo and Ohio Valley 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 Wells Fargo and Ohio Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo and Ohio Valley Banc, you can compare the effects of market volatilities on Wells Fargo and Ohio Valley 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 Wells Fargo with a short position of Ohio Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Ohio Valley.
Diversification Opportunities for Wells Fargo and Ohio Valley
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wells and Ohio is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo and Ohio Valley Banc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Valley Banc and Wells Fargo 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 Wells Fargo are associated (or correlated) with Ohio Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Valley Banc has no effect on the direction of Wells Fargo i.e., Wells Fargo and Ohio Valley go up and down completely randomly.
Pair Corralation between Wells Fargo and Ohio Valley
Considering the 90-day investment horizon Wells Fargo is expected to generate 1.1 times more return on investment than Ohio Valley. However, Wells Fargo is 1.1 times more volatile than Ohio Valley Banc. It trades about 0.24 of its potential returns per unit of risk. Ohio Valley Banc is currently generating about 0.13 per unit of risk. If you would invest 5,127 in Wells Fargo on September 12, 2024 and sell it today you would earn a total of 2,078 from holding Wells Fargo or generate 40.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Wells Fargo vs. Ohio Valley Banc
Performance |
| Timeline |
| Wells Fargo |
| Ohio Valley Banc |
Wells Fargo and Ohio Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Ohio Valley
The main advantage of trading using opposite Wells Fargo and Ohio Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo position performs unexpectedly, Ohio Valley 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 Ohio Valley will offset losses from the drop in Ohio Valley's long position.| Wells Fargo vs. Bank of America | Wells Fargo vs. Victory Integrity Smallmid Cap | Wells Fargo vs. Hilton Worldwide Holdings | Wells Fargo vs. NVIDIA |
| Ohio Valley vs. Home Federal Bancorp | Ohio Valley vs. Lake Shore Bancorp | Ohio Valley vs. Community West Bancshares | Ohio Valley vs. Magyar Bancorp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |