Correlation Between Waterstone Financial and Luther Burbank
Can any of the company-specific risk be diversified away by investing in both Waterstone Financial and Luther Burbank 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 Luther Burbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waterstone Financial and Luther Burbank, you can compare the effects of market volatilities on Waterstone Financial and Luther Burbank 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 Luther Burbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waterstone Financial and Luther Burbank.
Diversification Opportunities for Waterstone Financial and Luther Burbank
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Waterstone and Luther is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Waterstone Financial and Luther Burbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luther Burbank 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 Luther Burbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luther Burbank has no effect on the direction of Waterstone Financial i.e., Waterstone Financial and Luther Burbank go up and down completely randomly.
Pair Corralation between Waterstone Financial and Luther Burbank
If you would invest 1,356 in Waterstone Financial on August 25, 2024 and sell it today you would earn a total of 182.00 from holding Waterstone Financial or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.44% |
| Values | Daily Returns |
Waterstone Financial vs. Luther Burbank
Performance |
| Timeline |
| Waterstone Financial |
| Luther Burbank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Waterstone Financial and Luther Burbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waterstone Financial and Luther Burbank
The main advantage of trading using opposite Waterstone Financial and Luther Burbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waterstone Financial position performs unexpectedly, Luther Burbank 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 Luther Burbank will offset losses from the drop in Luther Burbank'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 |
| Luther Burbank vs. First Community | Luther Burbank vs. Community West Bancshares | Luther Burbank vs. First Financial Northwest | Luther Burbank vs. First Northwest 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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