Correlation Between WesBanco and First Guaranty
Can any of the company-specific risk be diversified away by investing in both WesBanco and First Guaranty 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 First Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and First Guaranty Bancshares, you can compare the effects of market volatilities on WesBanco and First Guaranty 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 First Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and First Guaranty.
Diversification Opportunities for WesBanco and First Guaranty
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WesBanco and First is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty 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 First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of WesBanco i.e., WesBanco and First Guaranty go up and down completely randomly.
Pair Corralation between WesBanco and First Guaranty
Assuming the 90 days horizon WesBanco is expected to generate 31.58 times less return on investment than First Guaranty. But when comparing it to its historical volatility, WesBanco is 6.04 times less risky than First Guaranty. It trades about 0.12 of its potential returns per unit of risk. First Guaranty Bancshares is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 1,075 in First Guaranty Bancshares on September 1, 2024 and sell it today you would earn a total of 356.00 from holding First Guaranty Bancshares or generate 33.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. First Guaranty Bancshares
Performance |
| Timeline |
| WesBanco |
| First Guaranty Bancshares |
WesBanco and First Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and First Guaranty
The main advantage of trading using opposite WesBanco and First Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, First Guaranty 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 First Guaranty will offset losses from the drop in First Guaranty's long position.| WesBanco vs. SFL Corporation | WesBanco vs. Eldorado Gold Corp | WesBanco vs. Griffon | WesBanco vs. Chester Mining |
| First Guaranty vs. Community West Bancshares | First Guaranty vs. First Northwest Bancorp | First Guaranty vs. First Financial Northwest | First Guaranty 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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