Correlation Between Waterstone Financial and Territorial Bancorp
Can any of the company-specific risk be diversified away by investing in both Waterstone Financial and Territorial Bancorp 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 Territorial Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waterstone Financial and Territorial Bancorp, you can compare the effects of market volatilities on Waterstone Financial and Territorial Bancorp 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 Territorial Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waterstone Financial and Territorial Bancorp.
Diversification Opportunities for Waterstone Financial and Territorial Bancorp
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Waterstone and Territorial is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Waterstone Financial and Territorial Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Territorial Bancorp 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 Territorial Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Territorial Bancorp has no effect on the direction of Waterstone Financial i.e., Waterstone Financial and Territorial Bancorp go up and down completely randomly.
Pair Corralation between Waterstone Financial and Territorial Bancorp
Given the investment horizon of 90 days Waterstone Financial is expected to generate 1.11 times more return on investment than Territorial Bancorp. However, Waterstone Financial is 1.11 times more volatile than Territorial Bancorp. It trades about -0.03 of its potential returns per unit of risk. Territorial Bancorp is currently generating about -0.22 per unit of risk. If you would invest 1,329 in Waterstone Financial on October 24, 2024 and sell it today you would lose (19.00) from holding Waterstone Financial or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Waterstone Financial vs. Territorial Bancorp
Performance |
| Timeline |
| Waterstone Financial |
| Territorial Bancorp |
Waterstone Financial and Territorial Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waterstone Financial and Territorial Bancorp
The main advantage of trading using opposite Waterstone Financial and Territorial Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waterstone Financial position performs unexpectedly, Territorial Bancorp 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 Territorial Bancorp will offset losses from the drop in Territorial Bancorp'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 |
| Territorial Bancorp vs. First Hawaiian | Territorial Bancorp vs. Bank of Hawaii | Territorial Bancorp vs. Financial Institutions | Territorial Bancorp vs. Heritage 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |