Correlation Between Northeast Indiana and United Bancorporation
Can any of the company-specific risk be diversified away by investing in both Northeast Indiana 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 Northeast Indiana and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northeast Indiana Bancorp and United Bancorporation of, you can compare the effects of market volatilities on Northeast Indiana 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 Northeast Indiana with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northeast Indiana and United Bancorporation.
Diversification Opportunities for Northeast Indiana and United Bancorporation
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Northeast and United is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Northeast Indiana Bancorp and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and Northeast Indiana 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 Northeast Indiana Bancorp 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 Northeast Indiana i.e., Northeast Indiana and United Bancorporation go up and down completely randomly.
Pair Corralation between Northeast Indiana and United Bancorporation
If you would invest 5,480 in United Bancorporation of on August 29, 2024 and sell it today you would earn a total of 370.00 from holding United Bancorporation of or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Northeast Indiana Bancorp vs. United Bancorp. of
Performance |
| Timeline |
| Northeast Indiana Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United Bancorporation |
Northeast Indiana and United Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northeast Indiana and United Bancorporation
The main advantage of trading using opposite Northeast Indiana and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northeast Indiana 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.| Northeast Indiana vs. PSB Holdings | Northeast Indiana vs. Chesapeake Finl Shs | Northeast Indiana vs. Eagle Financial Services | Northeast Indiana vs. CCFNB Bancorp |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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