Correlation Between Central Valley and First United
Can any of the company-specific risk be diversified away by investing in both Central Valley and First United 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 Central Valley and First United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Valley Community and First United, you can compare the effects of market volatilities on Central Valley and First United 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 Central Valley with a short position of First United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Valley and First United.
Diversification Opportunities for Central Valley and First United
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Central and First is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Central Valley Community and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United and Central Valley 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 Central Valley Community are associated (or correlated) with First United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of Central Valley i.e., Central Valley and First United go up and down completely randomly.
Pair Corralation between Central Valley and First United
If you would invest 2,157 in First United on August 27, 2024 and sell it today you would earn a total of 1,340 from holding First United or generate 62.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.53% |
| Values | Daily Returns |
Central Valley Community vs. First United
Performance |
| Timeline |
| Central Valley Community |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First United |
Central Valley and First United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Valley and First United
The main advantage of trading using opposite Central Valley and First United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Valley position performs unexpectedly, First United 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 First United will offset losses from the drop in First United's long position.| Central Valley vs. Home Federal Bancorp | Central Valley vs. First Northwest Bancorp | Central Valley vs. Magyar Bancorp | Central Valley vs. First United |
| First United vs. First Community | First United vs. Greene County Bancorp | First United vs. Community West Bancshares | First United vs. Affinity Bancshares |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |