Correlation Between Westbury Bancorp and Fifth Third

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

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

Diversification Opportunities for Westbury Bancorp and Fifth Third

0.0

Correlation Coefficient

Westbury Bancorp  Fifth Third

Pay attention - limited upside

The 3 months correlation between Westbury and Fifth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third Bancorp and Westbury 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 Westbury Bancorp are associated (or correlated) with Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Westbury Bancorp i.e., Westbury Bancorp and Fifth Third go up and down completely randomly.

Pair Corralation between Westbury Bancorp and Fifth Third

If you would invest (100.00) in Westbury Bancorp on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Westbury Bancorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Westbury Bancorp  vs.  Fifth Third Bancorp

Westbury Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westbury Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Westbury Bancorp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fifth Third Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fifth Third Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Westbury Bancorp and Fifth Third

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

The idea behind Westbury Bancorp and Fifth Third 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.