Correlation Between WesBanco and Alpha Bank
Can any of the company-specific risk be diversified away by investing in both WesBanco and Alpha Bank 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 WesBanco and Alpha Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Alpha Bank SA, you can compare the effects of market volatilities on WesBanco and Alpha Bank 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 WesBanco with a short position of Alpha Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Alpha Bank.
Diversification Opportunities for WesBanco and Alpha Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WesBanco and Alpha is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Alpha Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Bank SA and WesBanco 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 WesBanco are associated (or correlated) with Alpha Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Bank SA has no effect on the direction of WesBanco i.e., WesBanco and Alpha Bank go up and down completely randomly.
Pair Corralation between WesBanco and Alpha Bank
Assuming the 90 days horizon WesBanco is expected to generate 6.36 times less return on investment than Alpha Bank. But when comparing it to its historical volatility, WesBanco is 7.53 times less risky than Alpha Bank. It trades about 0.23 of its potential returns per unit of risk. Alpha Bank SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Alpha Bank SA on October 29, 2024 and sell it today you would earn a total of 3.00 from holding Alpha Bank SA or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Alpha Bank SA
Performance |
| Timeline |
| WesBanco |
| Alpha Bank SA |
WesBanco and Alpha Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Alpha Bank
The main advantage of trading using opposite WesBanco and Alpha Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, Alpha Bank 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 Alpha Bank will offset losses from the drop in Alpha Bank's long position.| WesBanco vs. Alaska Air Group | WesBanco vs. Tesla Inc | WesBanco vs. Modine Manufacturing | WesBanco vs. China Southern Airlines |
| Alpha Bank vs. First Hawaiian | Alpha Bank vs. Central Pacific Financial | Alpha Bank vs. Territorial Bancorp | Alpha Bank vs. Comerica |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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