Correlation Between Mid Penn and Wintrust Financial

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

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

Diversification Opportunities for Mid Penn and Wintrust Financial

0.66

Correlation Coefficient

Mid Penn  Wintrust Financial

Poor diversification

The 3 months correlation between Mid and Wintrust is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mid Penn Bancorp and Wintrust Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintrust Financial and Mid Penn 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 Mid Penn Bancorp are associated (or correlated) with Wintrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintrust Financial has no effect on the direction of Mid Penn i.e., Mid Penn and Wintrust Financial go up and down completely randomly.

Pair Corralation between Mid Penn and Wintrust Financial

Considering the 90-day investment horizon Mid Penn is expected to generate 1.88 times less return on investment than Wintrust Financial. But when comparing it to its historical volatility, Mid Penn Bancorp is 1.01 times less risky than Wintrust Financial. It trades about 0.15 of its potential returns per unit of risk. Wintrust Financial is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  10,099  in Wintrust Financial on April 20, 2025 and sell it today you would earn a total of  3,308  from holding Wintrust Financial or generate 32.76% return on investment over 90 days.

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

Mid Penn Bancorp  vs.  Wintrust Financial

Mid Penn Bancorp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mid Penn Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mid Penn sustained solid returns over the last few months and may actually be approaching a breakup point.

Wintrust Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wintrust Financial are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Wintrust Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mid Penn and Wintrust Financial

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

The idea behind Mid Penn Bancorp and Wintrust 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.