Correlation Between Astar and United Tennessee
Can any of the company-specific risk be diversified away by investing in both Astar and United Tennessee 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 Astar and United Tennessee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and United Tennessee Bankshares, you can compare the effects of market volatilities on Astar and United Tennessee 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 Astar with a short position of United Tennessee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and United Tennessee.
Diversification Opportunities for Astar and United Tennessee
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astar and United is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Astar and United Tennessee Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Tennessee Ban and Astar 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 Astar are associated (or correlated) with United Tennessee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Tennessee Ban has no effect on the direction of Astar i.e., Astar and United Tennessee go up and down completely randomly.
Pair Corralation between Astar and United Tennessee
Assuming the 90 days trading horizon Astar is expected to generate 3.44 times more return on investment than United Tennessee. However, Astar is 3.44 times more volatile than United Tennessee Bankshares. It trades about 0.01 of its potential returns per unit of risk. United Tennessee Bankshares is currently generating about -0.01 per unit of risk. If you would invest 7.90 in Astar on November 2, 2024 and sell it today you would lose (2.89) from holding Astar or give up 36.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 37.25% |
| Values | Daily Returns |
Astar vs. United Tennessee Bankshares
Performance |
| Timeline |
| Astar |
| United Tennessee Ban |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Astar and United Tennessee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and United Tennessee
The main advantage of trading using opposite Astar and United Tennessee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, United Tennessee 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 United Tennessee will offset losses from the drop in United Tennessee's long position.The idea behind Astar and United Tennessee Bankshares 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.| United Tennessee vs. United Bancorporation of | United Tennessee vs. Tri County Financial Group | United Tennessee vs. Quaint Oak Bancorp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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