Correlation Between WSFS Financial and SouthState

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

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

Diversification Opportunities for WSFS Financial and SouthState

0.89

Correlation Coefficient

WSFS Financial  SouthState

Very poor diversification

The 3 months correlation between WSFS and SouthState is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding WSFS Financial and SouthState in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SouthState 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 SouthState. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SouthState has no effect on the direction of WSFS Financial i.e., WSFS Financial and SouthState go up and down completely randomly.

Pair Corralation between WSFS Financial and SouthState

Given the investment horizon of 90 days WSFS Financial is expected to generate 1.18 times less return on investment than SouthState. In addition to that, WSFS Financial is 1.07 times more volatile than SouthState. It trades about 0.08 of its total potential returns per unit of risk. SouthState is currently generating about 0.11 per unit of volatility. If you would invest  9,567  in SouthState on September 2, 2024 and sell it today you would earn a total of  1,502  from holding SouthState or generate 15.7% 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.  SouthState

WSFS Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WSFS Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, WSFS Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

SouthState

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SouthState are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, SouthState sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WSFS Financial and SouthState

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

The idea behind WSFS Financial and SouthState 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.