Correlation Between WSFS Financial and Western New
Can any of the company-specific risk be diversified away by investing in both WSFS Financial and Western New 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 Western New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSFS Financial and Western New England, you can compare the effects of market volatilities on WSFS Financial and Western New 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 Western New. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSFS Financial and Western New.
Diversification Opportunities for WSFS Financial and Western New
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WSFS and Western is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and Western New England in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western New England 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 Western New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western New England has no effect on the direction of WSFS Financial i.e., WSFS Financial and Western New go up and down completely randomly.
Pair Corralation between WSFS Financial and Western New
Given the investment horizon of 90 days WSFS Financial is expected to generate 1.05 times less return on investment than Western New. In addition to that, WSFS Financial is 1.3 times more volatile than Western New England. It trades about 0.06 of its total potential returns per unit of risk. Western New England is currently generating about 0.09 per unit of volatility. If you would invest 568.00 in Western New England on August 31, 2024 and sell it today you would earn a total of 370.00 from holding Western New England or generate 65.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WSFS Financial vs. Western New England
Performance |
| Timeline |
| WSFS Financial |
| Western New England |
WSFS Financial and Western New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WSFS Financial and Western New
The main advantage of trading using opposite WSFS Financial and Western New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSFS Financial position performs unexpectedly, Western New 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 Western New will offset losses from the drop in Western New's long position.| WSFS Financial vs. Western New England | WSFS Financial vs. Great Southern Bancorp | WSFS Financial vs. First Financial | WSFS Financial vs. Heritage Financial |
| Western New vs. KeyCorp | Western New vs. Comerica | Western New vs. First Horizon National | Western New vs. Western Alliance Bancorporation |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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