Correlation Between WSFS Financial and Washington Trust

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

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

Diversification Opportunities for WSFS Financial and Washington Trust

0.87

Correlation Coefficient

WSFS Financial  Washington Trust

Very poor diversification

The 3 months correlation between WSFS and Washington is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and Washington Trust Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Trust Bancorp 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 Washington Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Trust Bancorp has no effect on the direction of WSFS Financial i.e., WSFS Financial and Washington Trust go up and down completely randomly.

Pair Corralation between WSFS Financial and Washington Trust

Given the investment horizon of 90 days WSFS Financial is expected to generate 0.93 times more return on investment than Washington Trust. However, WSFS Financial is 1.07 times less risky than Washington Trust. It trades about 0.09 of its potential returns per unit of risk. Washington Trust Bancorp is currently generating about 0.02 per unit of risk. If you would invest  5,207  in WSFS Financial on April 29, 2025 and sell it today you would earn a total of  429.00  from holding WSFS Financial or generate 8.24% 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.  Washington Trust Bancorp

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.

Washington Trust Bancorp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Washington Trust Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Washington Trust is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with WSFS Financial and Washington Trust

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

The idea behind WSFS Financial and Washington Trust Bancorp 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 Anywhere module to track or share privately all of your investments from the convenience of any device.