Correlation Between National Bank and Uwharrie Capital
Can any of the company-specific risk be diversified away by investing in both National 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 National 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 National Bank of and Uwharrie Capital Corp, you can compare the effects of market volatilities on National 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 National Bank with a short position of Uwharrie Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Uwharrie Capital.
Diversification Opportunities for National Bank and Uwharrie Capital
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and Uwharrie is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of 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 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 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 National Bank i.e., National Bank and Uwharrie Capital go up and down completely randomly.
Pair Corralation between National Bank and Uwharrie Capital
Assuming the 90 days horizon National Bank is expected to generate 3.59 times less return on investment than Uwharrie Capital. In addition to that, National Bank is 2.28 times more volatile than Uwharrie Capital Corp. It trades about 0.01 of its total potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.07 per unit of volatility. If you would invest 751.00 in Uwharrie Capital Corp on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Uwharrie Capital Corp or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.76% |
| Values | Daily Returns |
National Bank of vs. Uwharrie Capital Corp
Performance |
| Timeline |
| National Bank |
| Uwharrie Capital Corp |
National Bank and Uwharrie Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Uwharrie Capital
The main advantage of trading using opposite National Bank and Uwharrie Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National 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.| National Bank vs. First Hawaiian | National Bank vs. Central Pacific Financial | National Bank vs. Territorial Bancorp | National Bank vs. Comerica |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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