Correlation Between Oconee Financial and United Bancorporation
Can any of the company-specific risk be diversified away by investing in both Oconee Financial 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 Oconee Financial and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oconee Financial and United Bancorporation of, you can compare the effects of market volatilities on Oconee Financial 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 Oconee Financial with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oconee Financial and United Bancorporation.
Diversification Opportunities for Oconee Financial and United Bancorporation
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oconee and United is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Oconee Financial and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and Oconee Financial 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 Oconee Financial 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 Oconee Financial i.e., Oconee Financial and United Bancorporation go up and down completely randomly.
Pair Corralation between Oconee Financial and United Bancorporation
Given the investment horizon of 90 days Oconee Financial is expected to generate 2.84 times less return on investment than United Bancorporation. But when comparing it to its historical volatility, Oconee Financial is 1.66 times less risky than United Bancorporation. It trades about 0.03 of its potential returns per unit of risk. United Bancorporation of is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,859 in United Bancorporation of on November 2, 2024 and sell it today you would earn a total of 1,816 from holding United Bancorporation of or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Oconee Financial vs. United Bancorp. of
Performance |
| Timeline |
| Oconee Financial |
| United Bancorporation |
Oconee Financial and United Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oconee Financial and United Bancorporation
The main advantage of trading using opposite Oconee Financial and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oconee Financial 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.| Oconee Financial vs. Pioneer Bankcorp | Oconee Financial vs. Liberty Northwest Bancorp | Oconee Financial vs. First Community | Oconee Financial vs. Coeur dAlene Bancorp |
| United Bancorporation vs. MF Bancorp | United Bancorporation vs. Merchants Marine Bancorp | United Bancorporation vs. MNB Holdings Corp | United Bancorporation vs. Security Federal |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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