Correlation Between WSFS Financial and Hilltop Holdings
Can any of the company-specific risk be diversified away by investing in both WSFS Financial and Hilltop Holdings 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 WSFS Financial and Hilltop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSFS Financial and Hilltop Holdings, you can compare the effects of market volatilities on WSFS Financial and Hilltop Holdings 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 WSFS Financial with a short position of Hilltop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSFS Financial and Hilltop Holdings.
Diversification Opportunities for WSFS Financial and Hilltop Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WSFS and Hilltop is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and Hilltop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilltop Holdings and WSFS 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 WSFS Financial are associated (or correlated) with Hilltop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilltop Holdings has no effect on the direction of WSFS Financial i.e., WSFS Financial and Hilltop Holdings go up and down completely randomly.
Pair Corralation between WSFS Financial and Hilltop Holdings
Given the investment horizon of 90 days WSFS Financial is expected to generate 4.0 times less return on investment than Hilltop Holdings. In addition to that, WSFS Financial is 1.11 times more volatile than Hilltop Holdings. It trades about 0.05 of its total potential returns per unit of risk. Hilltop Holdings is currently generating about 0.24 per unit of volatility. If you would invest 2,874 in Hilltop Holdings on November 25, 2024 and sell it today you would earn a total of 240.00 from holding Hilltop Holdings or generate 8.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
WSFS Financial vs. Hilltop Holdings
Performance |
Timeline |
WSFS Financial |
Hilltop Holdings |
WSFS Financial and Hilltop Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WSFS Financial and Hilltop Holdings
The main advantage of trading using opposite WSFS Financial and Hilltop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSFS Financial position performs unexpectedly, Hilltop Holdings 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 Hilltop Holdings will offset losses from the drop in Hilltop Holdings' long position.WSFS Financial vs. Western New England | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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