Correlation Between Wintrust Financial and Auburn National
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Auburn National 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 Auburn National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintrust Financial Corp and Auburn National Bancorporation, you can compare the effects of market volatilities on Wintrust Financial and Auburn National 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 Auburn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Auburn National.
Diversification Opportunities for Wintrust Financial and Auburn National
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wintrust and Auburn is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Auburn National Bancorp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auburn National Banc 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 Corp are associated (or correlated) with Auburn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auburn National Banc has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Auburn National go up and down completely randomly.
Pair Corralation between Wintrust Financial and Auburn National
Assuming the 90 days horizon Wintrust Financial Corp is expected to generate 0.67 times more return on investment than Auburn National. However, Wintrust Financial Corp is 1.49 times less risky than Auburn National. It trades about 0.03 of its potential returns per unit of risk. Auburn National Bancorporation is currently generating about 0.01 per unit of risk. If you would invest 2,223 in Wintrust Financial Corp on August 31, 2024 and sell it today you would earn a total of 297.00 from holding Wintrust Financial Corp or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.53% |
| Values | Daily Returns |
Wintrust Financial Corp vs. Auburn National Bancorp.
Performance |
| Timeline |
| Wintrust Financial Corp |
| Auburn National Banc |
Wintrust Financial and Auburn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and Auburn National
The main advantage of trading using opposite Wintrust Financial and Auburn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, Auburn National 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 Auburn National will offset losses from the drop in Auburn National's long position.| Wintrust Financial vs. KeyCorp | Wintrust Financial vs. KeyCorp | Wintrust Financial vs. Fifth Third Bancorp | Wintrust Financial vs. Citizens Financial Group |
| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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