Correlation Between WesBanco and Popular
Can any of the company-specific risk be diversified away by investing in both WesBanco and Popular 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 Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Popular, you can compare the effects of market volatilities on WesBanco and Popular 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 Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Popular.
Diversification Opportunities for WesBanco and Popular
Very good diversification
The 3 months correlation between WesBanco and Popular is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular 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 Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of WesBanco i.e., WesBanco and Popular go up and down completely randomly.
Pair Corralation between WesBanco and Popular
Assuming the 90 days horizon WesBanco is expected to generate 2.64 times less return on investment than Popular. But when comparing it to its historical volatility, WesBanco is 2.5 times less risky than Popular. It trades about 0.08 of its potential returns per unit of risk. Popular is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6,090 in Popular on August 31, 2024 and sell it today you would earn a total of 3,846 from holding Popular or generate 63.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Popular
Performance |
| Timeline |
| WesBanco |
| Popular |
WesBanco and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Popular
The main advantage of trading using opposite WesBanco and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| WesBanco vs. KeyCorp | WesBanco vs. KeyCorp | WesBanco vs. Fifth Third Bancorp | WesBanco vs. Citizens Financial Group |
| Popular vs. OFG Bancorp | Popular vs. The First Bancshares, | Popular vs. First Commonwealth Financial | Popular vs. First 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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