Correlation Between Infinity Bank and Uwharrie Capital
Can any of the company-specific risk be diversified away by investing in both Infinity Bank and Uwharrie Capital 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 Infinity Bank and Uwharrie Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infinity Bank and Uwharrie Capital Corp, you can compare the effects of market volatilities on Infinity Bank and Uwharrie Capital 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 Infinity Bank with a short position of Uwharrie Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Bank and Uwharrie Capital.
Diversification Opportunities for Infinity Bank and Uwharrie Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Infinity and Uwharrie is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Bank and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp and Infinity Bank 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 Infinity Bank are associated (or correlated) with Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of Infinity Bank i.e., Infinity Bank and Uwharrie Capital go up and down completely randomly.
Pair Corralation between Infinity Bank and Uwharrie Capital
Given the investment horizon of 90 days Infinity Bank is expected to generate 1.77 times less return on investment than Uwharrie Capital. But when comparing it to its historical volatility, Infinity Bank is 1.96 times less risky than Uwharrie Capital. It trades about 0.04 of its potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Uwharrie Capital Corp on September 3, 2024 and sell it today you would earn a total of 140.00 from holding Uwharrie Capital Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.28% |
| Values | Daily Returns |
Infinity Bank vs. Uwharrie Capital Corp
Performance |
| Timeline |
| Infinity Bank |
| Uwharrie Capital Corp |
Infinity Bank and Uwharrie Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infinity Bank and Uwharrie Capital
The main advantage of trading using opposite Infinity Bank and Uwharrie Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infinity Bank position performs unexpectedly, Uwharrie Capital 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 Uwharrie Capital will offset losses from the drop in Uwharrie Capital's long position.| Infinity Bank vs. Bank Mandiri Persero | Infinity Bank vs. Century Financial Corp | Infinity Bank vs. Bank of Botetourt | Infinity Bank vs. FS Bancorp |
| Uwharrie Capital vs. ENB Financial Corp | Uwharrie Capital vs. First Reliance Bancshares | Uwharrie Capital vs. Oak Ridge Financial | Uwharrie Capital vs. Glen Burnie 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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