Correlation Between Wintrust Financial and Associated Banc

Can any of the company-specific risk be diversified away by investing in both Wintrust Financial and Associated Banc 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 Associated Banc 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 Associated Banc Corp, you can compare the effects of market volatilities on Wintrust Financial and Associated Banc 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 Associated Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintrust Financial and Associated Banc.

Diversification Opportunities for Wintrust Financial and Associated Banc

0.88

Correlation Coefficient

Wintrust Financial  Associated Banc

Very poor diversification

The 3 months correlation between Wintrust and Associated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial Corp and Associated Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Banc Corp 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 Associated Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Banc Corp has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Associated Banc go up and down completely randomly.

Pair Corralation between Wintrust Financial and Associated Banc

Assuming the 90 days horizon Wintrust Financial is expected to generate 5.8 times less return on investment than Associated Banc. But when comparing it to its historical volatility, Wintrust Financial Corp is 15.21 times less risky than Associated Banc. It trades about 0.41 of its potential returns per unit of risk. Associated Banc Corp is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,895  in Associated Banc Corp on May 3, 2025 and sell it today you would earn a total of  139.00  from holding Associated Banc Corp or generate 7.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	90.16%
Values	Daily Returns

Wintrust Financial Corp  vs.  Associated Banc Corp

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. Even with relatively invariable fundamental indicators, Wintrust Financial is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Associated Banc Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Banc Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental drivers, Associated Banc may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Wintrust Financial and Associated Banc

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

The idea behind Wintrust Financial Corp and Associated Banc Corp 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.