Correlation Between Tectonic Financial and WSFS Financial
Can any of the company-specific risk be diversified away by investing in both Tectonic Financial and WSFS Financial 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 Tectonic Financial and WSFS Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tectonic Financial PR and WSFS Financial, you can compare the effects of market volatilities on Tectonic Financial and WSFS Financial 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 Tectonic Financial with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tectonic Financial and WSFS Financial.
Diversification Opportunities for Tectonic Financial and WSFS Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tectonic and WSFS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tectonic Financial PR and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and Tectonic 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 Tectonic Financial PR are associated (or correlated) with WSFS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSFS Financial has no effect on the direction of Tectonic Financial i.e., Tectonic Financial and WSFS Financial go up and down completely randomly.
Pair Corralation between Tectonic Financial and WSFS Financial
Assuming the 90 days horizon Tectonic Financial is expected to generate 5.2 times less return on investment than WSFS Financial. But when comparing it to its historical volatility, Tectonic Financial PR is 2.84 times less risky than WSFS Financial. It trades about 0.13 of its potential returns per unit of risk. WSFS Financial is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,711 in WSFS Financial on April 15, 2025 and sell it today you would earn a total of 1,112 from holding WSFS Financial or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Tectonic Financial PR vs. WSFS Financial
Performance |
| Timeline |
| Tectonic Financial |
| WSFS Financial |
Tectonic Financial and WSFS Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tectonic Financial and WSFS Financial
The main advantage of trading using opposite Tectonic Financial and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tectonic Financial position performs unexpectedly, WSFS Financial 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 WSFS Financial will offset losses from the drop in WSFS Financial's long position.| Tectonic Financial vs. Associated Banc Corp | Tectonic Financial vs. Bridgewater Bancshares Depositary | Tectonic Financial vs. First Guaranty Bancshares | Tectonic Financial vs. First Merchants |
| WSFS Financial vs. Univest Pennsylvania | WSFS Financial vs. Waterstone Financial | WSFS Financial vs. Mid Penn Bancorp | WSFS Financial vs. ST Bancorp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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