Correlation Between National Bank and United Bankshares
Can any of the company-specific risk be diversified away by investing in both National Bank and United Bankshares 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 National Bank and United Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank of and United Bankshares, you can compare the effects of market volatilities on National Bank and United Bankshares 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 National Bank with a short position of United Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and United Bankshares.
Diversification Opportunities for National Bank and United Bankshares
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and United is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and United Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankshares and National 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 National Bank of are associated (or correlated) with United Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankshares has no effect on the direction of National Bank i.e., National Bank and United Bankshares go up and down completely randomly.
Pair Corralation between National Bank and United Bankshares
Assuming the 90 days horizon National Bank of is expected to generate 1.49 times more return on investment than United Bankshares. However, National Bank is 1.49 times more volatile than United Bankshares. It trades about 0.22 of its potential returns per unit of risk. United Bankshares is currently generating about 0.08 per unit of risk. If you would invest 792.00 in National Bank of on October 29, 2024 and sell it today you would earn a total of 68.00 from holding National Bank of or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Bank of vs. United Bankshares
Performance |
| Timeline |
| National Bank |
| United Bankshares |
National Bank and United Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and United Bankshares
The main advantage of trading using opposite National Bank and United Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, United Bankshares 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 Bankshares will offset losses from the drop in United Bankshares' long position.| National Bank vs. First Hawaiian | National Bank vs. Central Pacific Financial | National Bank vs. Territorial Bancorp | National Bank vs. Comerica |
| United Bankshares vs. Peoples Bancorp | United Bankshares vs. Eagle Bancorp | United Bankshares vs. Northrim BanCorp | United Bankshares vs. Pacific Premier 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |