Correlation Between Prosperity Bancshares and Wintrust Financial
Can any of the company-specific risk be diversified away by investing in both Prosperity 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 Prosperity 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 Prosperity Bancshares and Wintrust Financial Corp, you can compare the effects of market volatilities on Prosperity 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 Prosperity Bancshares with a short position of Wintrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosperity Bancshares and Wintrust Financial.
Diversification Opportunities for Prosperity Bancshares and Wintrust Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosperity and Wintrust is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Prosperity 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 Prosperity 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 Prosperity 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 Prosperity Bancshares i.e., Prosperity Bancshares and Wintrust Financial go up and down completely randomly.
Pair Corralation between Prosperity Bancshares and Wintrust Financial
Allowing for the 90-day total investment horizon Prosperity Bancshares is expected to generate 4.07 times more return on investment than Wintrust Financial. However, Prosperity Bancshares is 4.07 times more volatile than Wintrust Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Wintrust Financial Corp is currently generating about 0.11 per unit of risk. If you would invest 5,259 in Prosperity Bancshares on December 3, 2024 and sell it today you would earn a total of 2,357 from holding Prosperity Bancshares or generate 44.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Prosperity Bancshares vs. Wintrust Financial Corp
Performance |
Timeline |
Prosperity Bancshares |
Wintrust Financial Corp |
Prosperity Bancshares and Wintrust Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prosperity Bancshares and Wintrust Financial
The main advantage of trading using opposite Prosperity Bancshares and Wintrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosperity 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.Prosperity Bancshares vs. Heritage Commerce Corp | Prosperity Bancshares vs. Business First Bancshares | Prosperity Bancshares vs. German American Bancorp | Prosperity Bancshares vs. Texas Capital Bancshares |
Wintrust Financial vs. Wintrust Financial Corp | Wintrust Financial vs. WesBanco | Wintrust Financial vs. Pinnacle Financial Partners |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |