Correlation Between Wintrust Financial and Dorman Products

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

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

Diversification Opportunities for Wintrust Financial and Dorman Products

0.47

Correlation Coefficient

Wintrust Financial  Dorman Products

Very weak diversification

The 3 months correlation between Wintrust and Dorman is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wintrust Financial and Dorman Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorman Products 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 are associated (or correlated) with Dorman Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorman Products has no effect on the direction of Wintrust Financial i.e., Wintrust Financial and Dorman Products go up and down completely randomly.

Pair Corralation between Wintrust Financial and Dorman Products

Given the investment horizon of 90 days Wintrust Financial is expected to generate 12.77 times less return on investment than Dorman Products. But when comparing it to its historical volatility, Wintrust Financial is 1.62 times less risky than Dorman Products. It trades about 0.01 of its potential returns per unit of risk. Dorman Products is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  12,073  in Dorman Products on July 15, 2025 and sell it today you would earn a total of  1,766  from holding Dorman Products or generate 14.63% return on investment over 90 days.

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

Wintrust Financial  vs.  Dorman Products

Wintrust Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wintrust Financial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Wintrust Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Dorman Products

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Dorman Products are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Dorman Products displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wintrust Financial and Dorman Products

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

The idea behind Wintrust Financial and Dorman Products 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..