Correlation Between Western New and Washington Federal
Can any of the company-specific risk be diversified away by investing in both Western New and Washington Federal 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 Western New and Washington Federal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western New England and Washington Federal, you can compare the effects of market volatilities on Western New and Washington Federal 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 Western New with a short position of Washington Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western New and Washington Federal.
Diversification Opportunities for Western New and Washington Federal
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Washington is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western New England and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal and Western New 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 Western New England are associated (or correlated) with Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of Western New i.e., Western New and Washington Federal go up and down completely randomly.
Pair Corralation between Western New and Washington Federal
Given the investment horizon of 90 days Western New England is expected to generate 1.77 times more return on investment than Washington Federal. However, Western New is 1.77 times more volatile than Washington Federal. It trades about 0.07 of its potential returns per unit of risk. Washington Federal is currently generating about -0.06 per unit of risk. If you would invest 998.00 in Western New England on July 19, 2025 and sell it today you would earn a total of 91.00 from holding Western New England or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western New England vs. Washington Federal
Performance |
| Timeline |
| Western New England |
| Washington Federal |
Western New and Washington Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western New and Washington Federal
The main advantage of trading using opposite Western New and Washington Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western New position performs unexpectedly, Washington Federal 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 Washington Federal will offset losses from the drop in Washington Federal's long position.| Western New vs. Southern Missouri Bancorp | Western New vs. IF Bancorp | Western New vs. Colony Bankcorp | Western New vs. RBB Bancorp |
| Washington Federal vs. First Financial | Washington Federal vs. Western New England | Washington Federal vs. Southern Missouri Bancorp | Washington Federal vs. Waterstone Financial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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