Correlation Between Pinnacle Financial and United Community
Can any of the company-specific risk be diversified away by investing in both Pinnacle Financial and United Community 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 Pinnacle Financial and United Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Financial Partners and United Community Banks, you can compare the effects of market volatilities on Pinnacle Financial and United Community 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 Pinnacle Financial with a short position of United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Financial and United Community.
Diversification Opportunities for Pinnacle Financial and United Community
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pinnacle and United is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Financial Partners and United Community Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Community Banks and Pinnacle 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 Pinnacle Financial Partners are associated (or correlated) with United Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Community Banks has no effect on the direction of Pinnacle Financial i.e., Pinnacle Financial and United Community go up and down completely randomly.
Pair Corralation between Pinnacle Financial and United Community
Assuming the 90 days horizon Pinnacle Financial Partners is expected to generate 0.81 times more return on investment than United Community. However, Pinnacle Financial Partners is 1.23 times less risky than United Community. It trades about 0.08 of its potential returns per unit of risk. United Community Banks is currently generating about -0.03 per unit of risk. If you would invest 2,387 in Pinnacle Financial Partners on November 2, 2024 and sell it today you would earn a total of 105.00 from holding Pinnacle Financial Partners or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.21% |
| Values | Daily Returns |
Pinnacle Financial Partners vs. United Community Banks
Performance |
| Timeline |
| Pinnacle Financial |
| United Community Banks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pinnacle Financial and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Financial and United Community
The main advantage of trading using opposite Pinnacle Financial and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Financial position performs unexpectedly, United Community 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 Community will offset losses from the drop in United Community's long position.| Pinnacle Financial vs. OceanFirst Financial Corp | Pinnacle Financial vs. Heartland Financial USA | Pinnacle Financial vs. Wintrust Financial Corp | Pinnacle Financial vs. Dime Community Bancshares |
| United Community vs. Pinnacle Financial Partners | United Community vs. Wintrust Financial Corp | United Community vs. Heartland Financial USA | United Community vs. OceanFirst Financial Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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