Correlation Between Western New and WSFS Financial
Can any of the company-specific risk be diversified away by investing in both Western New and WSFS Financial 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 Western New and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western New England and WSFS Financial, you can compare the effects of market volatilities on Western New and WSFS Financial 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 Western New with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western New and WSFS Financial.
Diversification Opportunities for Western New and WSFS Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and WSFS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western New England and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and Western New 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 Western New England are associated (or correlated) with WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of Western New i.e., Western New and WSFS Financial go up and down completely randomly.
Pair Corralation between Western New and WSFS Financial
Given the investment horizon of 90 days Western New is expected to generate 1.45 times less return on investment than WSFS Financial. But when comparing it to its historical volatility, Western New England is 1.64 times less risky than WSFS Financial. It trades about 0.09 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,951 in WSFS Financial on November 1, 2024 and sell it today you would earn a total of 613.00 from holding WSFS Financial or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western New England vs. WSFS Financial
Performance |
| Timeline |
| Western New England |
| WSFS Financial |
Western New and WSFS Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western New and WSFS Financial
The main advantage of trading using opposite Western New and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western New position performs unexpectedly, WSFS Financial 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 WSFS Financial will offset losses from the drop in WSFS Financial's long position.| Western New vs. IF Bancorp | Western New vs. Shore Bancshares | Western New vs. Colony Bankcorp | Western New vs. Investar Holding Corp |
| WSFS Financial vs. Western New England | WSFS Financial vs. Great Southern Bancorp | WSFS Financial vs. First Financial | WSFS Financial vs. Heritage 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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