Correlation Between Wintrust Financial and PacWest Bancorp
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and PacWest 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 Wintrust Financial and PacWest Bancorp 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 PacWest Bancorp, you can compare the effects of market volatilities on Wintrust Financial and PacWest 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 Wintrust Financial with a short position of PacWest Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and PacWest Bancorp.
Diversification Opportunities for Wintrust Financial and PacWest Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wintrust and PacWest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and PacWest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacWest 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 PacWest Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacWest Bancorp has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and PacWest Bancorp go up and down completely randomly.
Pair Corralation between Wintrust Financial and PacWest Bancorp
Assuming the 90 days horizon Wintrust Financial is expected to generate 2.32 times less return on investment than PacWest Bancorp. But when comparing it to its historical volatility, Wintrust Financial Corp is 10.27 times less risky than PacWest Bancorp. It trades about 0.03 of its potential returns per unit of risk. PacWest Bancorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,409 in PacWest Bancorp on August 29, 2024 and sell it today you would lose (1,355) from holding PacWest Bancorp or give up 56.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 31.45% |
| Values | Daily Returns |
Wintrust Financial Corp vs. PacWest Bancorp
Performance |
| Timeline |
| Wintrust Financial Corp |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wintrust Financial and PacWest Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and PacWest Bancorp
The main advantage of trading using opposite Wintrust Financial and PacWest Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, PacWest 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 PacWest Bancorp will offset losses from the drop in PacWest Bancorp'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 |
| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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