Correlation Between WVS Financial and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both WVS Financial and Farmers Bank 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 WVS Financial and Farmers Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WVS Financial Corp and The Farmers Bank, you can compare the effects of market volatilities on WVS Financial and Farmers Bank 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 WVS Financial with a short position of Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of WVS Financial and Farmers Bank.
Diversification Opportunities for WVS Financial and Farmers Bank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between WVS and Farmers is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding WVS Financial Corp and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank and WVS 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 WVS Financial Corp are associated (or correlated) with Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of WVS Financial i.e., WVS Financial and Farmers Bank go up and down completely randomly.
Pair Corralation between WVS Financial and Farmers Bank
If you would invest 2,210 in The Farmers Bank on August 29, 2024 and sell it today you would earn a total of 10.00 from holding The Farmers Bank or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.45% |
| Values | Daily Returns |
WVS Financial Corp vs. The Farmers Bank
Performance |
| Timeline |
| WVS Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Farmers Bank |
WVS Financial and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WVS Financial and Farmers Bank
The main advantage of trading using opposite WVS Financial and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WVS Financial position performs unexpectedly, Farmers Bank 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 Farmers Bank will offset losses from the drop in Farmers Bank's long position.| WVS Financial vs. Pioneer Bankcorp | WVS Financial vs. Liberty Northwest Bancorp | WVS Financial vs. First Community | WVS Financial vs. Coeur dAlene Bancorp |
| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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