Correlation Between WSFS Financial and Seacoast Banking

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

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

Diversification Opportunities for WSFS Financial and Seacoast Banking

0.45

Correlation Coefficient

WSFS Financial  Seacoast Banking

Very weak diversification

The 3 months correlation between WSFS and Seacoast is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and Seacoast Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seacoast Banking 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 Seacoast Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seacoast Banking has no effect on the direction of WSFS Financial i.e., WSFS Financial and Seacoast Banking go up and down completely randomly.

Pair Corralation between WSFS Financial and Seacoast Banking

Given the investment horizon of 90 days WSFS Financial is expected to under-perform the Seacoast Banking. But the stock apears to be less risky and, when comparing its historical volatility, WSFS Financial is 1.12 times less risky than Seacoast Banking. The stock trades about -0.02 of its potential returns per unit of risk. The Seacoast Banking is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3,078  in Seacoast Banking on August 25, 2025 and sell it today you would lose (22.00) from holding Seacoast Banking or give up 0.71% of portfolio value over 90 days.

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

WSFS Financial  vs.  Seacoast Banking

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.

Seacoast Banking

Risk-Adjusted Performance

Weakest

Over the last 90 days Seacoast Banking has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Seacoast Banking is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with WSFS Financial and Seacoast Banking

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

The idea behind WSFS Financial and Seacoast Banking 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.