Correlation Between WesBanco and First Western

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

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

Diversification Opportunities for WesBanco and First Western

0.52

Correlation Coefficient

WesBanco  First Western

Very weak diversification

The 3 months correlation between WesBanco and First is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and First Western Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Western Financial and WesBanco 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 WesBanco are associated (or correlated) with First Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Western Financial has no effect on the direction of WesBanco i.e., WesBanco and First Western go up and down completely randomly.

Pair Corralation between WesBanco and First Western

Assuming the 90 days horizon WesBanco is expected to generate 11.21 times less return on investment than First Western. But when comparing it to its historical volatility, WesBanco is 38.3 times less risky than First Western. It trades about 0.3 of its potential returns per unit of risk. First Western Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,350  in First Western Financial on September 12, 2025 and sell it today you would earn a total of  229.00  from holding First Western Financial or generate 9.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	82.54%
Values	Daily Returns

WesBanco  vs.  First Western Financial

WesBanco

Risk-Adjusted Performance

Solid

Over the last 90 days WesBanco has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, WesBanco is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

First Western Financial

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in First Western Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, First Western may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with WesBanco and First Western

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

The idea behind WesBanco and First Western 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 Transaction History module to view history of all your transactions and understand their impact on performance.