Correlation Between WTB Financial and Kish Bancorp
Can any of the company-specific risk be diversified away by investing in both WTB Financial and Kish 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 WTB Financial and Kish Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WTB Financial and Kish Bancorp, you can compare the effects of market volatilities on WTB Financial and Kish 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 WTB Financial with a short position of Kish Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of WTB Financial and Kish Bancorp.
Diversification Opportunities for WTB Financial and Kish Bancorp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WTB and Kish is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WTB Financial and Kish Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kish Bancorp and WTB 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 WTB Financial are associated (or correlated) with Kish Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kish Bancorp has no effect on the direction of WTB Financial i.e., WTB Financial and Kish Bancorp go up and down completely randomly.
Pair Corralation between WTB Financial and Kish Bancorp
Assuming the 90 days horizon WTB Financial is expected to generate 3.92 times less return on investment than Kish Bancorp. But when comparing it to its historical volatility, WTB Financial is 2.29 times less risky than Kish Bancorp. It trades about 0.06 of its potential returns per unit of risk. Kish Bancorp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,413 in Kish Bancorp on November 3, 2024 and sell it today you would earn a total of 87.00 from holding Kish Bancorp or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WTB Financial vs. Kish Bancorp
Performance |
| Timeline |
| WTB Financial |
| Kish Bancorp |
WTB Financial and Kish Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WTB Financial and Kish Bancorp
The main advantage of trading using opposite WTB Financial and Kish Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WTB Financial position performs unexpectedly, Kish 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 Kish Bancorp will offset losses from the drop in Kish Bancorp's long position.| WTB Financial vs. Pioneer Bankcorp | WTB Financial vs. Liberty Northwest Bancorp | WTB Financial vs. First Community | WTB Financial vs. Coeur dAlene Bancorp |
| Kish Bancorp vs. CNB Corporation | Kish Bancorp vs. FNB Inc | Kish Bancorp vs. Community Bankers | Kish Bancorp vs. Apollo 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 Stocks Directory module to find actively traded stocks across global markets.
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