Correlation Between Waterstone Financial and Popular
Can any of the company-specific risk be diversified away by investing in both Waterstone Financial 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 Waterstone Financial and Popular into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waterstone Financial and Popular, you can compare the effects of market volatilities on Waterstone Financial 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 Waterstone Financial with a short position of Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waterstone Financial and Popular.
Diversification Opportunities for Waterstone Financial and Popular
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Waterstone and Popular is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Waterstone Financial and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular and Waterstone Financial 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 Waterstone Financial 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 Waterstone Financial i.e., Waterstone Financial and Popular go up and down completely randomly.
Pair Corralation between Waterstone Financial and Popular
Given the investment horizon of 90 days Waterstone Financial is expected to generate 1.87 times more return on investment than Popular. However, Waterstone Financial is 1.87 times more volatile than Popular. It trades about 0.04 of its potential returns per unit of risk. Popular is currently generating about 0.03 per unit of risk. If you would invest 1,203 in Waterstone Financial on November 3, 2024 and sell it today you would earn a total of 171.00 from holding Waterstone Financial or generate 14.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.24% |
| Values | Daily Returns |
Waterstone Financial vs. Popular
Performance |
| Timeline |
| Waterstone Financial |
| Popular |
Waterstone Financial and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waterstone Financial and Popular
The main advantage of trading using opposite Waterstone Financial and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waterstone Financial 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.| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
| Popular vs. Penns Woods Bancorp | Popular vs. 1st Source | Popular vs. Great Southern Bancorp | Popular vs. Waterstone Financial |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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