Correlation Between Old Point and United Bankshares
Can any of the company-specific risk be diversified away by investing in both Old Point 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 Old Point and United Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Point Financial and United Bankshares, you can compare the effects of market volatilities on Old Point 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 Old Point with a short position of United Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Point and United Bankshares.
Diversification Opportunities for Old Point and United Bankshares
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and United is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Old Point Financial and United Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankshares and Old Point 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 Old Point Financial 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 Old Point i.e., Old Point and United Bankshares go up and down completely randomly.
Pair Corralation between Old Point and United Bankshares
Given the investment horizon of 90 days Old Point Financial is expected to generate 1.23 times more return on investment than United Bankshares. However, Old Point is 1.23 times more volatile than United Bankshares. It trades about 0.02 of its potential returns per unit of risk. United Bankshares is currently generating about 0.01 per unit of risk. If you would invest 2,441 in Old Point Financial on November 9, 2024 and sell it today you would earn a total of 83.00 from holding Old Point Financial or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Old Point Financial vs. United Bankshares
Performance |
| Timeline |
| Old Point Financial |
| United Bankshares |
Old Point and United Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Point and United Bankshares
The main advantage of trading using opposite Old Point and United Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Point 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.| Old Point vs. First Community | Old Point vs. Oak Valley Bancorp | Old Point vs. Chemung Financial Corp | Old Point vs. Home Bancorp |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |