Correlation Between Kish Bancorp and WTB Financial

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

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

Diversification Opportunities for Kish Bancorp and WTB Financial

0.37

Correlation Coefficient

Kish Bancorp  WTB Financial

Weak diversification

The 3 months correlation between Kish and WTB is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kish Bancorp and WTB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WTB Financial and Kish Bancorp 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 Kish Bancorp are associated (or correlated) with WTB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WTB Financial has no effect on the direction of Kish Bancorp i.e., Kish Bancorp and WTB Financial go up and down completely randomly.

Pair Corralation between Kish Bancorp and WTB Financial

Given the investment horizon of 90 days Kish Bancorp is expected to generate 1.86 times less return on investment than WTB Financial. In addition to that, Kish Bancorp is 1.3 times more volatile than WTB Financial. It trades about 0.02 of its total potential returns per unit of risk. WTB Financial is currently generating about 0.05 per unit of volatility. If you would invest  25,810  in WTB Financial on September 4, 2024 and sell it today you would earn a total of  4,490  from holding WTB Financial or generate 17.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.88%
Values	Daily Returns

Kish Bancorp  vs.  WTB Financial

Kish Bancorp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kish Bancorp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Kish Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WTB Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WTB Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, WTB Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kish Bancorp and WTB Financial

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

The idea behind Kish Bancorp and WTB 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.