Correlation Between WSFS Financial and HomeStreet

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

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

Diversification Opportunities for WSFS Financial and HomeStreet

0.82

Correlation Coefficient

WSFS Financial  HomeStreet

Very poor diversification

The 3 months correlation between WSFS and HomeStreet is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and HomeStreet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeStreet and WSFS Financial 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 WSFS Financial are associated (or correlated) with HomeStreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeStreet has no effect on the direction of WSFS Financial i.e., WSFS Financial and HomeStreet go up and down completely randomly.

Pair Corralation between WSFS Financial and HomeStreet

Given the investment horizon of 90 days WSFS Financial is expected to generate 0.82 times more return on investment than HomeStreet. However, WSFS Financial is 1.21 times less risky than HomeStreet. It trades about 0.22 of its potential returns per unit of risk. HomeStreet is currently generating about 0.17 per unit of risk. If you would invest  4,752  in WSFS Financial on April 20, 2025 and sell it today you would earn a total of  1,117  from holding WSFS Financial or generate 23.51% return on investment over 90 days.

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

WSFS Financial  vs.  HomeStreet

WSFS Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WSFS Financial are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, WSFS Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

HomeStreet

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HomeStreet are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, HomeStreet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WSFS Financial and HomeStreet

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

The idea behind WSFS Financial and HomeStreet 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.