Correlation Between Flow Capital and WCF Bancorp

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

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

Diversification Opportunities for Flow Capital and WCF Bancorp

-0.45

Correlation Coefficient

Flow Capital  WCF Bancorp

Very good diversification

The 3 months correlation between Flow and WCF is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and WCF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WCF Bancorp and Flow Capital 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 Flow Capital Corp are associated (or correlated) with WCF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WCF Bancorp has no effect on the direction of Flow Capital i.e., Flow Capital and WCF Bancorp go up and down completely randomly.

Pair Corralation between Flow Capital and WCF Bancorp

Assuming the 90 days horizon Flow Capital Corp is expected to generate 0.72 times more return on investment than WCF Bancorp. However, Flow Capital Corp is 1.39 times less risky than WCF Bancorp. It trades about 0.06 of its potential returns per unit of risk. WCF Bancorp is currently generating about 0.03 per unit of risk. If you would invest  38.00  in Flow Capital Corp on August 25, 2025 and sell it today you would earn a total of  19.00  from holding Flow Capital Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.68%
Values	Daily Returns

Flow Capital Corp  vs.  WCF Bancorp

Flow Capital Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Capital Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Flow Capital may actually be approaching a critical reversion point that can send shares even higher in December 2025.

WCF Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days WCF Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Flow Capital and WCF Bancorp

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

The idea behind Flow Capital Corp and WCF 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.