Correlation Between Wintrust Financial and Midland States
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Midland States 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 Midland States 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 Midland States Bancorp, you can compare the effects of market volatilities on Wintrust Financial and Midland States 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 Midland States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Midland States.
Diversification Opportunities for Wintrust Financial and Midland States
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wintrust and Midland is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Midland States Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midland States Bancorp 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 Midland States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midland States Bancorp has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Midland States go up and down completely randomly.
Pair Corralation between Wintrust Financial and Midland States
Assuming the 90 days horizon Wintrust Financial Corp is expected to generate 0.36 times more return on investment than Midland States. However, Wintrust Financial Corp is 2.74 times less risky than Midland States. It trades about 0.1 of its potential returns per unit of risk. Midland States Bancorp is currently generating about -0.01 per unit of risk. If you would invest 2,515 in Wintrust Financial Corp on August 25, 2024 and sell it today you would earn a total of 9.00 from holding Wintrust Financial Corp or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintrust Financial Corp vs. Midland States Bancorp
Performance |
| Timeline |
| Wintrust Financial Corp |
| Midland States Bancorp |
Wintrust Financial and Midland States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and Midland States
The main advantage of trading using opposite Wintrust Financial and Midland States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, Midland States 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 Midland States will offset losses from the drop in Midland States' long position.| Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Bank of America | Wintrust Financial vs. KeyCorp |
| Midland States vs. Texas Capital Bancshares | Midland States vs. Merchants Bancorp | Midland States vs. Wintrust Financial Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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