Correlation Between WTB Financial and Kish Bancorp

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

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

Diversification Opportunities for WTB Financial and Kish Bancorp

0.58

Correlation Coefficient

WTB Financial  Kish Bancorp

Very weak diversification

The 3 months correlation between WTB and Kish is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding WTB Financial and Kish Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kish Bancorp and WTB Financial 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 WTB Financial are associated (or correlated) with Kish Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kish Bancorp has no effect on the direction of WTB Financial i.e., WTB Financial and Kish Bancorp go up and down completely randomly.

Pair Corralation between WTB Financial and Kish Bancorp

Assuming the 90 days horizon WTB Financial is expected to generate 0.45 times more return on investment than Kish Bancorp. However, WTB Financial is 2.23 times less risky than Kish Bancorp. It trades about 0.04 of its potential returns per unit of risk. Kish Bancorp is currently generating about -0.05 per unit of risk. If you would invest  30,600  in WTB Financial on December 2, 2024 and sell it today you would earn a total of  275.00  from holding WTB Financial or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

WTB Financial  vs.  Kish Bancorp

WTB Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WTB Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, WTB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kish Bancorp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kish Bancorp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kish Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with WTB Financial and Kish Bancorp

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

The idea behind WTB Financial and Kish 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.