Correlation Between Washington Federal and ST Bancorp
Can any of the company-specific risk be diversified away by investing in both Washington Federal and ST 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 Washington Federal and ST Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and ST Bancorp, you can compare the effects of market volatilities on Washington Federal and ST 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 Washington Federal with a short position of ST Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and ST Bancorp.
Diversification Opportunities for Washington Federal and ST Bancorp
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and STBA is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and ST Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ST Bancorp and Washington Federal 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 Washington Federal are associated (or correlated) with ST Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ST Bancorp has no effect on the direction of Washington Federal i.e., Washington Federal and ST Bancorp go up and down completely randomly.
Pair Corralation between Washington Federal and ST Bancorp
Given the investment horizon of 90 days Washington Federal is expected to generate 1.38 times less return on investment than ST Bancorp. But when comparing it to its historical volatility, Washington Federal is 1.14 times less risky than ST Bancorp. It trades about 0.04 of its potential returns per unit of risk. ST Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,850 in ST Bancorp on September 9, 2025 and sell it today you would earn a total of 162.00 from holding ST Bancorp or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Washington Federal vs. ST Bancorp
Performance |
| Timeline |
| Washington Federal |
| ST Bancorp |
Washington Federal and ST Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and ST Bancorp
The main advantage of trading using opposite Washington Federal and ST Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, ST 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 ST Bancorp will offset losses from the drop in ST Bancorp's long position.| Washington Federal vs. Trustmark | Washington Federal vs. Provident Financial Services | Washington Federal vs. First Financial Bancorp | Washington Federal vs. Western Alliance Bancorporation |
| ST Bancorp vs. 1st Source | ST Bancorp vs. TriCo Bancshares | ST Bancorp vs. Lakeland Financial | ST Bancorp vs. Merchants 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |