Correlation Between BCB Bancorp and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp and Univest Pennsylvania 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 BCB Bancorp and Univest Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and Univest Pennsylvania, you can compare the effects of market volatilities on BCB Bancorp and Univest Pennsylvania 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 BCB Bancorp with a short position of Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and Univest Pennsylvania.
Diversification Opportunities for BCB Bancorp and Univest Pennsylvania
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BCB and Univest is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania and BCB Bancorp 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 BCB Bancorp are associated (or correlated) with Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of BCB Bancorp i.e., BCB Bancorp and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between BCB Bancorp and Univest Pennsylvania
Given the investment horizon of 90 days BCB Bancorp is expected to generate 1.41 times less return on investment than Univest Pennsylvania. But when comparing it to its historical volatility, BCB Bancorp is 1.64 times less risky than Univest Pennsylvania. It trades about 0.25 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,763 in Univest Pennsylvania on September 1, 2024 and sell it today you would earn a total of 413.00 from holding Univest Pennsylvania or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCB Bancorp vs. Univest Pennsylvania
Performance |
| Timeline |
| BCB Bancorp |
| Univest Pennsylvania |
BCB Bancorp and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and Univest Pennsylvania
The main advantage of trading using opposite BCB Bancorp and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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