Correlation Between First Keystone and Wayne Savings

Can any of the company-specific risk be diversified away by investing in both First Keystone and Wayne Savings 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 First Keystone and Wayne Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for First Keystone and Wayne Savings

0.0

Correlation Coefficient

First Keystone  Wayne Savings

Pay attention - limited upside

The 3 months correlation between First and Wayne is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp and Wayne Savings Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayne Savings Bancshares and First Keystone 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 First Keystone Corp are associated (or correlated) with Wayne Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayne Savings Bancshares has no effect on the direction of First Keystone i.e., First Keystone and Wayne Savings go up and down completely randomly.

Pair Corralation between First Keystone and Wayne Savings

If you would invest  1,387  in First Keystone Corp on December 27, 2024 and sell it today you would earn a total of  18.00  from holding First Keystone Corp or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Keystone Corp  vs.  Wayne Savings Bancshares

First Keystone Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Keystone Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, First Keystone is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Wayne Savings Bancshares

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wayne Savings Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Wayne Savings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with First Keystone and Wayne Savings

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

The idea behind First Keystone Corp and Wayne Savings Bancshares 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.