Correlation Between Western Alliance and Powszechna Kasa

Can any of the company-specific risk be diversified away by investing in both Western Alliance and Powszechna Kasa 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 Western Alliance and Powszechna Kasa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Western Alliance Bancorporation and Powszechna Kasa Oszczednosci, you can compare the effects of market volatilities on Western Alliance and Powszechna Kasa 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 Western Alliance with a short position of Powszechna Kasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alliance and Powszechna Kasa.

Diversification Opportunities for Western Alliance and Powszechna Kasa

0.03

Correlation Coefficient

Western Alliance  Powszechna Kasa

Significant diversification

The 3 months correlation between Western and Powszechna is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. and Powszechna Kasa Oszczednosci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powszechna Kasa Oszc and Western Alliance 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 Western Alliance Bancorporation are associated (or correlated) with Powszechna Kasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powszechna Kasa Oszc has no effect on the direction of Western Alliance i.e., Western Alliance and Powszechna Kasa go up and down completely randomly.

Pair Corralation between Western Alliance and Powszechna Kasa

Considering the 90-day investment horizon Western Alliance Bancorporation is expected to generate 0.51 times more return on investment than Powszechna Kasa. However, Western Alliance Bancorporation is 1.95 times less risky than Powszechna Kasa. It trades about 0.07 of its potential returns per unit of risk. Powszechna Kasa Oszczednosci is currently generating about 0.04 per unit of risk. If you would invest  8,441  in Western Alliance Bancorporation on October 26, 2024 and sell it today you would earn a total of  798.00  from holding Western Alliance Bancorporation or generate 9.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Western Alliance Bancorp.  vs.  Powszechna Kasa Oszczednosci

Western Alliance Ban

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Alliance Bancorporation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Western Alliance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Powszechna Kasa Oszc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Powszechna Kasa Oszczednosci are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady forward-looking signals, Powszechna Kasa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Western Alliance and Powszechna Kasa

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

The idea behind Western Alliance Bancorporation and Powszechna Kasa Oszczednosci 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.