Correlation Between William Penn and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both William Penn and Civista Bancshares 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 Penn and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Penn Bancorp and Civista Bancshares, you can compare the effects of market volatilities on William Penn and Civista Bancshares 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 Penn with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Penn and Civista Bancshares.
Diversification Opportunities for William Penn and Civista Bancshares
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between William and Civista is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares and William Penn 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 Penn Bancorp are associated (or correlated) with Civista Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civista Bancshares has no effect on the direction of William Penn i.e., William Penn and Civista Bancshares go up and down completely randomly.
Pair Corralation between William Penn and Civista Bancshares
Given the investment horizon of 90 days William Penn is expected to generate 3.14 times less return on investment than Civista Bancshares. But when comparing it to its historical volatility, William Penn Bancorp is 1.4 times less risky than Civista Bancshares. It trades about 0.12 of its potential returns per unit of risk. Civista Bancshares is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,009 in Civista Bancshares on August 31, 2024 and sell it today you would earn a total of 272.00 from holding Civista Bancshares or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Penn Bancorp vs. Civista Bancshares
Performance |
| Timeline |
| William Penn Bancorp |
| Civista Bancshares |
William Penn and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Penn and Civista Bancshares
The main advantage of trading using opposite William Penn and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn position performs unexpectedly, Civista Bancshares 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 Civista Bancshares will offset losses from the drop in Civista Bancshares' long position.| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
| Civista Bancshares vs. Home Federal Bancorp | Civista Bancshares vs. First Financial Northwest | Civista Bancshares vs. First Northwest Bancorp | Civista Bancshares vs. First Capital |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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