Correlation Between Bank of Utica and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Bank of Utica and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and Dow Jones.
Diversification Opportunities for Bank of Utica and Dow Jones
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Bank of Utica i.e., Bank of Utica and Dow Jones go up and down completely randomly.
Pair Corralation between Bank of Utica and Dow Jones
Given the investment horizon of 90 days Bank of Utica is expected to generate 1.16 times more return on investment than Dow Jones. However, Bank of Utica is 1.16 times more volatile than Dow Jones Industrial. It trades about 0.34 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 45,000 in Bank of Utica on August 29, 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 | 95.65% |
| Values | Daily Returns |
Bank of Utica vs. Dow Jones Industrial
Performance |
| Timeline |
Bank of Utica and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bank of Utica
Pair trading matchups for Bank of Utica
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bank of Utica and Dow Jones
The main advantage of trading using opposite Bank of Utica and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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