Correlation Between Northwest Bancshares and Meridian Bancorp
Can any of the company-specific risk be diversified away by investing in both Northwest Bancshares and Meridian 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 Northwest Bancshares and Meridian Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northwest Bancshares and Meridian Bancorp, you can compare the effects of market volatilities on Northwest Bancshares and Meridian 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 Northwest Bancshares with a short position of Meridian Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northwest Bancshares and Meridian Bancorp.
Diversification Opportunities for Northwest Bancshares and Meridian Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northwest and Meridian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northwest Bancshares and Meridian Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Bancorp and Northwest Bancshares 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 Northwest Bancshares are associated (or correlated) with Meridian Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Bancorp has no effect on the direction of Northwest Bancshares i.e., Northwest Bancshares and Meridian Bancorp go up and down completely randomly.
Pair Corralation between Northwest Bancshares and Meridian Bancorp
If you would invest (100.00) in Meridian Bancorp on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Meridian Bancorp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Northwest Bancshares vs. Meridian Bancorp
Performance |
| Timeline |
| Northwest Bancshares |
| Meridian Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northwest Bancshares and Meridian Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northwest Bancshares and Meridian Bancorp
The main advantage of trading using opposite Northwest Bancshares and Meridian Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northwest Bancshares position performs unexpectedly, Meridian 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 Meridian Bancorp will offset losses from the drop in Meridian Bancorp's long position.| Northwest Bancshares vs. ST Bancorp | Northwest Bancshares vs. CrossFirst Bankshares | Northwest Bancshares vs. Enterprise Financial Services | Northwest Bancshares vs. The First Bancshares |
| Meridian Bancorp vs. AssetMark Financial Holdings | Meridian Bancorp vs. Neogen | Meridian Bancorp vs. Artisan Partners Asset | Meridian Bancorp vs. Waters |
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.
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