Correlation Between CMUV Bancorp and U I
Can any of the company-specific risk be diversified away by investing in both CMUV Bancorp and U I 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 CMUV Bancorp and U I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMUV Bancorp and U I Financial, you can compare the effects of market volatilities on CMUV Bancorp and U I 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 CMUV Bancorp with a short position of U I. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMUV Bancorp and U I.
Diversification Opportunities for CMUV Bancorp and U I
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CMUV and UNIF is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding CMUV Bancorp and U I Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U I Financial and CMUV 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 CMUV Bancorp are associated (or correlated) with U I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U I Financial has no effect on the direction of CMUV Bancorp i.e., CMUV Bancorp and U I go up and down completely randomly.
Pair Corralation between CMUV Bancorp and U I
Given the investment horizon of 90 days CMUV Bancorp is expected to generate 0.95 times more return on investment than U I. However, CMUV Bancorp is 1.05 times less risky than U I. It trades about 0.08 of its potential returns per unit of risk. U I Financial is currently generating about -0.46 per unit of risk. If you would invest 1,950 in CMUV Bancorp on August 28, 2024 and sell it today you would earn a total of 55.00 from holding CMUV Bancorp or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CMUV Bancorp vs. U I Financial
Performance |
| Timeline |
| CMUV Bancorp |
| U I Financial |
CMUV Bancorp and U I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMUV Bancorp and U I
The main advantage of trading using opposite CMUV Bancorp and U I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMUV Bancorp position performs unexpectedly, U I 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 U I will offset losses from the drop in U I's long position.| CMUV Bancorp vs. Pioneer Bankcorp | CMUV Bancorp vs. Summit Bancshares | CMUV Bancorp vs. Liberty Northwest Bancorp | CMUV Bancorp vs. First Community |
| U I vs. CIB Marine Bancshares | U I vs. Heartland Banccorp | U I vs. United Bancorporation of | U I vs. Harbor Bankshares |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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