Correlation Between William Penn and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both William Penn and Hancock Whitney 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 Hancock Whitney 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 Hancock Whitney Corp, you can compare the effects of market volatilities on William Penn and Hancock Whitney 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 Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Penn and Hancock Whitney.
Diversification Opportunities for William Penn and Hancock Whitney
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between William and Hancock is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding William Penn Bancorp and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp 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 Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of William Penn i.e., William Penn and Hancock Whitney go up and down completely randomly.
Pair Corralation between William Penn and Hancock Whitney
Given the investment horizon of 90 days William Penn is expected to generate 2.22 times less return on investment than Hancock Whitney. But when comparing it to its historical volatility, William Penn Bancorp is 2.39 times less risky than Hancock Whitney. It trades about 0.2 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,178 in Hancock Whitney Corp on August 25, 2024 and sell it today you would earn a total of 819.00 from holding Hancock Whitney Corp or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Penn Bancorp vs. Hancock Whitney Corp
Performance |
| Timeline |
| William Penn Bancorp |
| Hancock Whitney Corp |
William Penn and Hancock Whitney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Penn and Hancock Whitney
The main advantage of trading using opposite William Penn and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Penn position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney's long position.| William Penn vs. Fifth Third Bancorp | William Penn vs. Zions Bancorporation | William Penn vs. Huntington Bancshares Incorporated | William Penn vs. PNC Financial Services |
| Hancock Whitney vs. Home Bancorp | Hancock Whitney vs. First Business Financial | Hancock Whitney vs. LINKBANCORP | Hancock Whitney vs. Great Southern 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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