Correlation Between WesBanco and Civista Bancshares
Can any of the company-specific risk be diversified away by investing in both WesBanco 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 WesBanco and Civista Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Civista Bancshares, you can compare the effects of market volatilities on WesBanco 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 WesBanco with a short position of Civista Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Civista Bancshares.
Diversification Opportunities for WesBanco and Civista Bancshares
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WesBanco and Civista is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Civista Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civista Bancshares 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 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 WesBanco i.e., WesBanco and Civista Bancshares go up and down completely randomly.
Pair Corralation between WesBanco and Civista Bancshares
Assuming the 90 days horizon WesBanco is expected to generate 23.17 times less return on investment than Civista Bancshares. But when comparing it to its historical volatility, WesBanco is 7.61 times less risky than Civista Bancshares. It trades about 0.14 of its potential returns per unit of risk. Civista Bancshares is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,835 in Civista Bancshares on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Civista Bancshares or generate 26.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Civista Bancshares
Performance |
| Timeline |
| WesBanco |
| Civista Bancshares |
WesBanco and Civista Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Civista Bancshares
The main advantage of trading using opposite WesBanco and Civista Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco 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.The idea behind WesBanco and Civista Bancshares pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Civista Bancshares vs. Fifth Third Bancorp | Civista Bancshares vs. Zions Bancorporation | Civista Bancshares vs. Huntington Bancshares Incorporated | Civista Bancshares 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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