Correlation Between WesBanco and Utah Medical

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

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

Diversification Opportunities for WesBanco and Utah Medical

-0.51

Correlation Coefficient

WesBanco  Utah Medical

Excellent diversification

The 3 months correlation between WesBanco and Utah is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Utah Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utah Medical Products and WesBanco 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 WesBanco are associated (or correlated) with Utah Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utah Medical Products has no effect on the direction of WesBanco i.e., WesBanco and Utah Medical go up and down completely randomly.

Pair Corralation between WesBanco and Utah Medical

Assuming the 90 days horizon WesBanco is expected to generate 0.35 times more return on investment than Utah Medical. However, WesBanco is 2.83 times less risky than Utah Medical. It trades about 0.13 of its potential returns per unit of risk. Utah Medical Products is currently generating about -0.04 per unit of risk. If you would invest  2,278  in WesBanco on October 9, 2024 and sell it today you would earn a total of  263.00  from holding WesBanco or generate 11.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WesBanco  vs.  Utah Medical Products

WesBanco

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WesBanco are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, WesBanco is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Utah Medical Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Utah Medical Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with WesBanco and Utah Medical

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

The idea behind WesBanco and Utah Medical Products 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.