Correlation Between WSFS Financial and TriCo Bancshares

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

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

Diversification Opportunities for WSFS Financial and TriCo Bancshares

0.79

Correlation Coefficient

WSFS Financial  TriCo Bancshares

Poor diversification

The 3 months correlation between WSFS and TriCo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and TriCo Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriCo Bancshares 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 TriCo Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriCo Bancshares has no effect on the direction of WSFS Financial i.e., WSFS Financial and TriCo Bancshares go up and down completely randomly.

Pair Corralation between WSFS Financial and TriCo Bancshares

Given the investment horizon of 90 days WSFS Financial is expected to generate 4.65 times less return on investment than TriCo Bancshares. In addition to that, WSFS Financial is 1.01 times more volatile than TriCo Bancshares. It trades about 0.01 of its total potential returns per unit of risk. TriCo Bancshares is currently generating about 0.05 per unit of volatility. If you would invest  4,071  in TriCo Bancshares on May 18, 2025 and sell it today you would earn a total of  187.00  from holding TriCo Bancshares or generate 4.59% return on investment over 90 days.

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

WSFS Financial  vs.  TriCo Bancshares

WSFS Financial

Risk-Adjusted Performance

Weakest

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

TriCo Bancshares

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in TriCo Bancshares are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, TriCo Bancshares is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with WSFS Financial and TriCo Bancshares

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

The idea behind WSFS Financial and TriCo Bancshares 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.