Correlation Between Wintrust Financial and Nelnet

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

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

Diversification Opportunities for Wintrust Financial and Nelnet

0.91

Correlation Coefficient

Wintrust Financial  Nelnet

Almost no diversification

The 3 months correlation between Wintrust and Nelnet is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc and Wintrust 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 Wintrust Financial Corp are associated (or correlated) with Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Nelnet go up and down completely randomly.

Pair Corralation between Wintrust Financial and Nelnet

Assuming the 90 days horizon Wintrust Financial is expected to generate 7.62 times less return on investment than Nelnet. But when comparing it to its historical volatility, Wintrust Financial Corp is 17.72 times less risky than Nelnet. It trades about 0.41 of its potential returns per unit of risk. Nelnet Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  10,654  in Nelnet Inc on May 4, 2025 and sell it today you would earn a total of  1,655  from holding Nelnet Inc or generate 15.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	77.78%
Values	Daily Returns

Wintrust Financial Corp  vs.  Nelnet Inc

Wintrust Financial Corp

Risk-Adjusted Performance

Very Strong

Over the last 90 days Wintrust Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Wintrust Financial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Nelnet Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nelnet Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Nelnet demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wintrust Financial and Nelnet

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

The idea behind Wintrust Financial Corp and Nelnet Inc 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.