Correlation Between FNB and WSFS Financial

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

By analyzing existing cross correlation between FNB Inc and WSFS Financial, you can compare the effects of market volatilities on FNB 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 FNB with a short position of WSFS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of FNB and WSFS Financial.

Diversification Opportunities for FNB and WSFS Financial

-0.17

Correlation Coefficient

FNB  WSFS Financial

Good diversification

The 3 months correlation between FNB and WSFS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding FNB Inc and WSFS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSFS Financial and FNB 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 FNB Inc 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 FNB i.e., FNB and WSFS Financial go up and down completely randomly.

Pair Corralation between FNB and WSFS Financial

Given the investment horizon of 90 days FNB Inc is expected to under-perform the WSFS Financial. But the pink sheet apears to be less risky and, when comparing its historical volatility, FNB Inc is 1.44 times less risky than WSFS Financial. The pink sheet trades about -0.04 of its potential returns per unit of risk. The WSFS Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5,209  in WSFS Financial on April 28, 2025 and sell it today you would earn a total of  427.00  from holding WSFS Financial or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FNB Inc  vs.  WSFS Financial

FNB Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days FNB Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, FNB is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

WSFS Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WSFS Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, WSFS Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with FNB and WSFS Financial

The main advantage of trading using opposite FNB and WSFS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FNB 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.

The idea behind FNB Inc and WSFS Financial 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.