Correlation Between WesBanco and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both WesBanco and Heartland 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 WesBanco and Heartland Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Heartland Financial USA, you can compare the effects of market volatilities on WesBanco and Heartland 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 WesBanco with a short position of Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Heartland Financial.
Diversification Opportunities for WesBanco and Heartland Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WesBanco and Heartland is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of WesBanco i.e., WesBanco and Heartland Financial go up and down completely randomly.
Pair Corralation between WesBanco and Heartland Financial
Assuming the 90 days horizon WesBanco is expected to generate 1.14 times more return on investment than Heartland Financial. However, WesBanco is 1.14 times more volatile than Heartland Financial USA. It trades about 0.14 of its potential returns per unit of risk. Heartland Financial USA is currently generating about 0.12 per unit of risk. If you would invest 2,484 in WesBanco on August 28, 2024 and sell it today you would earn a total of 26.00 from holding WesBanco or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Heartland Financial USA
Performance |
| Timeline |
| WesBanco |
| Heartland Financial USA |
WesBanco and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Heartland Financial
The main advantage of trading using opposite WesBanco and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, Heartland 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.The idea behind WesBanco and Heartland Financial USA 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.| Heartland Financial vs. Capital One Financial | Heartland Financial vs. Capital One Financial | Heartland Financial vs. Bank of America |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |