Correlation Between Wintrust Financial and Bank Ozk
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Bank Ozk 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 Bank Ozk 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 Bank Ozk Preferred, you can compare the effects of market volatilities on Wintrust Financial and Bank Ozk 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 Bank Ozk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Bank Ozk.
Diversification Opportunities for Wintrust Financial and Bank Ozk
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wintrust and Bank is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Bank Ozk Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ozk Preferred 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 Bank Ozk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ozk Preferred has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Bank Ozk go up and down completely randomly.
Pair Corralation between Wintrust Financial and Bank Ozk
Assuming the 90 days horizon Wintrust Financial Corp is expected to generate 0.12 times more return on investment than Bank Ozk. However, Wintrust Financial Corp is 8.07 times less risky than Bank Ozk. It trades about 0.16 of its potential returns per unit of risk. Bank Ozk Preferred is currently generating about -0.12 per unit of risk. If you would invest 2,498 in Wintrust Financial Corp on August 29, 2024 and sell it today you would earn a total of 25.00 from holding Wintrust Financial Corp or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintrust Financial Corp vs. Bank Ozk Preferred
Performance |
| Timeline |
| Wintrust Financial Corp |
| Bank Ozk Preferred |
Wintrust Financial and Bank Ozk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and Bank Ozk
The main advantage of trading using opposite Wintrust Financial and Bank Ozk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, Bank Ozk 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 Bank Ozk will offset losses from the drop in Bank Ozk's long position.| Wintrust Financial vs. Wintrust Financial Corp | Wintrust Financial vs. WesBanco | Wintrust Financial vs. Heartland Financial USA | Wintrust Financial vs. Pinnacle Financial Partners |
| Bank Ozk vs. Regions Financial | Bank Ozk vs. Huntington Bancshares Incorporated | Bank Ozk vs. Texas Capital Bancshares | Bank Ozk vs. Washington Federal |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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