Correlation Between Bank of Utica and River Financial
Can any of the company-specific risk be diversified away by investing in both Bank of Utica and River Financial 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 River Financial 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 River Financial, you can compare the effects of market volatilities on Bank of Utica and River Financial 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 River Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Utica and River Financial.
Diversification Opportunities for Bank of Utica and River Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and River is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Utica and River Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River 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 River Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River Financial has no effect on the direction of Bank of Utica i.e., Bank of Utica and River Financial go up and down completely randomly.
Pair Corralation between Bank of Utica and River Financial
Given the investment horizon of 90 days Bank of Utica is expected to generate 1.39 times more return on investment than River Financial. However, Bank of Utica is 1.39 times more volatile than River Financial. It trades about 0.21 of its potential returns per unit of risk. River Financial is currently generating about 0.06 per unit of risk. If you would invest 44,210 in Bank of Utica on October 22, 2024 and sell it today you would earn a total of 10,290 from holding Bank of Utica or generate 23.28% 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. River Financial
Performance |
| Timeline |
| Bank of Utica |
| River Financial |
Bank of Utica and River Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Utica and River Financial
The main advantage of trading using opposite Bank of Utica and River Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Utica position performs unexpectedly, River Financial 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 River Financial will offset losses from the drop in River Financial'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 |
| River Financial vs. Potomac Bancshares | River Financial vs. Mountain Pacific Bancorp | River Financial vs. Pacific Premier Bancorp | River Financial vs. Old National 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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