Correlation Between Wintrust Financial and Triumph Financial
Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Triumph Financial 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 Triumph Financial 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 Triumph Financial, you can compare the effects of market volatilities on Wintrust Financial and Triumph Financial 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 Triumph Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Triumph Financial.
Diversification Opportunities for Wintrust Financial and Triumph Financial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wintrust and Triumph is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Triumph Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triumph Financial 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 Triumph Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triumph Financial has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Triumph Financial go up and down completely randomly.
Pair Corralation between Wintrust Financial and Triumph Financial
Assuming the 90 days horizon Wintrust Financial is expected to generate 2.87 times less return on investment than Triumph Financial. But when comparing it to its historical volatility, Wintrust Financial Corp is 4.88 times less risky than Triumph Financial. It trades about 0.18 of its potential returns per unit of risk. Triumph Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,089 in Triumph Financial on August 30, 2024 and sell it today you would earn a total of 281.00 from holding Triumph Financial or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintrust Financial Corp vs. Triumph Financial
Performance |
| Timeline |
| Wintrust Financial Corp |
| Triumph Financial |
Wintrust Financial and Triumph Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintrust Financial and Triumph Financial
The main advantage of trading using opposite Wintrust Financial and Triumph Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintrust Financial position performs unexpectedly, Triumph Financial 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 Triumph Financial will offset losses from the drop in Triumph Financial's long position.| Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Capital One Financial | Wintrust Financial vs. Bank of America | Wintrust Financial vs. KeyCorp |
| Triumph Financial vs. SVB T Corp | Triumph Financial vs. First Capital | Triumph Financial vs. Pioneer Bankcorp | Triumph Financial vs. Liberty Northwest 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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