Correlation Between Equity Bancshares, and Wintrust Financial

Can any of the company-specific risk be diversified away by investing in both Equity Bancshares, and Wintrust 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 Equity Bancshares, and Wintrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equity Bancshares, and Wintrust Financial Corp, you can compare the effects of market volatilities on Equity Bancshares, and Wintrust 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 Equity Bancshares, with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Bancshares, and Wintrust Financial.

Diversification Opportunities for Equity Bancshares, and Wintrust Financial

-0.33

Correlation Coefficient

Equity Bancshares,  Wintrust Financial

Very good diversification

The 3 months correlation between Equity and Wintrust is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Equity Bancshares, and Wintrust Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial Corp and Equity Bancshares, 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 Equity Bancshares, are associated (or correlated) with Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial Corp has no effect on the direction of Equity Bancshares, i.e., Equity Bancshares, and Wintrust Financial go up and down completely randomly.

Pair Corralation between Equity Bancshares, and Wintrust Financial

Given the investment horizon of 90 days Equity Bancshares, is expected to under-perform the Wintrust Financial. In addition to that, Equity Bancshares, is 8.14 times more volatile than Wintrust Financial Corp. It trades about -0.06 of its total potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.15 per unit of volatility. If you would invest  2,482  in Wintrust Financial Corp on December 29, 2024 and sell it today you would earn a total of  46.00  from holding Wintrust Financial Corp or generate 1.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Equity Bancshares,  vs.  Wintrust Financial Corp

Equity Bancshares,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equity Bancshares, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Wintrust Financial Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wintrust Financial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Wintrust Financial is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Equity Bancshares, and Wintrust Financial

The main advantage of trading using opposite Equity Bancshares, and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Bancshares, position performs unexpectedly, Wintrust 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 Wintrust Financial will offset losses from the drop in Wintrust Financial's long position.

The idea behind Equity Bancshares, and Wintrust Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.