Correlation Between Wintrust Financial and Home BancShares
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Home BancShares 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 Wintrust Financial and Home BancShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintrust Financial and Home BancShares, you can compare the effects of market volatilities on Wintrust Financial and Home BancShares 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 Wintrust Financial with a short position of Home BancShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Home BancShares.
Diversification Opportunities for Wintrust Financial and Home BancShares
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wintrust and Home is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial and Home BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home BancShares and Wintrust 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 Wintrust Financial are associated (or correlated) with Home BancShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home BancShares has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Home BancShares go up and down completely randomly.
Pair Corralation between Wintrust Financial and Home BancShares
Given the investment horizon of 90 days Wintrust Financial is expected to generate 1.07 times more return on investment than Home BancShares. However, Wintrust Financial is 1.07 times more volatile than Home BancShares. It trades about 0.27 of its potential returns per unit of risk. Home BancShares is currently generating about 0.23 per unit of risk. If you would invest 11,566 in Wintrust Financial on August 28, 2024 and sell it today you would earn a total of 2,263 from holding Wintrust Financial or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintrust Financial vs. Home BancShares
Performance |
| Timeline |
| Wintrust Financial |
| Home BancShares |
Wintrust Financial and Home BancShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and Home BancShares
The main advantage of trading using opposite Wintrust Financial and Home BancShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, Home BancShares 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 Home BancShares will offset losses from the drop in Home BancShares' long position.| Wintrust Financial vs. Bank of Marin | Wintrust Financial vs. First Financial | Wintrust Financial vs. TriCo Bancshares | Wintrust Financial vs. Community Trust Bancorp |
| Home BancShares vs. Community West Bancshares | Home BancShares vs. First Financial Northwest | Home BancShares vs. First Northwest Bancorp | Home BancShares vs. First Capital |
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 Positions Ratings module to 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.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |