Correlation Between Bank of Utica and Century Next
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and Century Next 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 Bank of Utica and Century Next into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Utica and Century Next Financial, you can compare the effects of market volatilities on Bank of Utica and Century Next 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 Bank of Utica with a short position of Century Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and Century Next.
Diversification Opportunities for Bank of Utica and Century Next
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Century is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and Century Next Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Next Financial and Bank of Utica 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 Bank of Utica are associated (or correlated) with Century Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Next Financial has no effect on the direction of Bank of Utica i.e., Bank of Utica and Century Next go up and down completely randomly.
Pair Corralation between Bank of Utica and Century Next
Given the investment horizon of 90 days Bank of Utica is expected to generate 2.01 times more return on investment than Century Next. However, Bank of Utica is 2.01 times more volatile than Century Next Financial. It trades about 0.34 of its potential returns per unit of risk. Century Next Financial is currently generating about 0.15 per unit of risk. If you would invest 45,000 in Bank of Utica on September 1, 2024 and sell it today you would earn a total of 3,800 from holding Bank of Utica or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Utica vs. Century Next Financial
Performance |
| Timeline |
| Bank of Utica |
| Century Next Financial |
Bank of Utica and Century Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and Century Next
The main advantage of trading using opposite Bank of Utica and Century Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, Century Next 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 Century Next will offset losses from the drop in Century Next's long position.| Bank of Utica vs. CCSB Financial Corp | Bank of Utica vs. First Community Financial | Bank of Utica vs. BEO Bancorp | Bank of Utica vs. First Community |
| Century Next vs. Piraeus Bank SA | Century Next vs. Turkiye Garanti Bankasi | Century Next vs. Delhi Bank Corp | Century Next vs. Uwharrie Capital Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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