Correlation Between MFS Investment and United Bancorporation
Can any of the company-specific risk be diversified away by investing in both MFS Investment and United Bancorporation 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 MFS Investment and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and United Bancorporation of, you can compare the effects of market volatilities on MFS Investment and United Bancorporation 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 MFS Investment with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and United Bancorporation.
Diversification Opportunities for MFS Investment and United Bancorporation
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and United is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and MFS Investment 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 MFS Investment Grade are associated (or correlated) with United Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorporation has no effect on the direction of MFS Investment i.e., MFS Investment and United Bancorporation go up and down completely randomly.
Pair Corralation between MFS Investment and United Bancorporation
Considering the 90-day investment horizon MFS Investment is expected to generate 3.39 times less return on investment than United Bancorporation. But when comparing it to its historical volatility, MFS Investment Grade is 3.5 times less risky than United Bancorporation. It trades about 0.12 of its potential returns per unit of risk. United Bancorporation of is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,107 in United Bancorporation of on August 28, 2024 and sell it today you would earn a total of 1,793 from holding United Bancorporation of or generate 43.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
MFS Investment Grade vs. United Bancorp. of
Performance |
| Timeline |
| MFS Investment Grade |
| United Bancorporation |
MFS Investment and United Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and United Bancorporation
The main advantage of trading using opposite MFS Investment and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, United Bancorporation 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 United Bancorporation will offset losses from the drop in United Bancorporation's long position.| MFS Investment vs. PowerUp Acquisition Corp | MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International |
| United Bancorporation vs. MF Bancorp | United Bancorporation vs. MNB Holdings Corp | United Bancorporation vs. Security Federal | United Bancorporation 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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