Correlation Between Great Southern and WSFS Financial

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Can any of the company-specific risk be diversified away by investing in both Great Southern and WSFS 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 Great Southern and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Southern Bancorp and WSFS Financial, you can compare the effects of market volatilities on Great Southern and WSFS 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 Great Southern with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Southern and WSFS Financial.

Diversification Opportunities for Great Southern and WSFS Financial

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Great and WSFS is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Great Southern Bancorp and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and Great Southern 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 Great Southern Bancorp are associated (or correlated) with WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of Great Southern i.e., Great Southern and WSFS Financial go up and down completely randomly.

Pair Corralation between Great Southern and WSFS Financial

Given the investment horizon of 90 days Great Southern Bancorp is expected to generate 0.96 times more return on investment than WSFS Financial. However, Great Southern Bancorp is 1.04 times less risky than WSFS Financial. It trades about 0.0 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.0 per unit of risk. If you would invest  6,161  in Great Southern Bancorp on October 22, 2024 and sell it today you would lose (119.00) from holding Great Southern Bancorp or give up 1.93% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Great Southern Bancorp  vs.  WSFS Financial

 Performance 
       Timeline  
Great Southern Bancorp 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Great Southern Bancorp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental drivers, Great Southern may actually be approaching a critical reversion point that can send shares even higher in February 2025.
WSFS Financial 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in WSFS Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, WSFS Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Great Southern and WSFS Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great Southern and WSFS Financial

The main advantage of trading using opposite Great Southern and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Southern position performs unexpectedly, WSFS 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 WSFS Financial will offset losses from the drop in WSFS Financial's long position.
The idea behind Great Southern Bancorp and WSFS Financial 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.
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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