Correlation Between Washington Federal and High Country

Can any of the company-specific risk be diversified away by investing in both Washington Federal and High Country 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 Washington Federal and High Country into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Washington Federal and High Country

-0.47

Correlation Coefficient

Washington Federal  High Country

Very good diversification

The 3 months correlation between Washington and High is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and High Country Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Country Bancorp and Washington Federal 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 Washington Federal are associated (or correlated) with High Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Country Bancorp has no effect on the direction of Washington Federal i.e., Washington Federal and High Country go up and down completely randomly.

Pair Corralation between Washington Federal and High Country

If you would invest  1,728  in Washington Federal on September 3, 2024 and sell it today you would earn a total of  75.00  from holding Washington Federal or generate 4.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Washington Federal  vs.  High Country Bancorp

Washington Federal

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Washington Federal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Washington Federal is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

High Country Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Country Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, High Country is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Washington Federal and High Country

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

The idea behind Washington Federal and High Country Bancorp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.