Correlation Between Stagwell and United Community
Can any of the company-specific risk be diversified away by investing in both Stagwell 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 Stagwell and United Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and United Community Banks,, you can compare the effects of market volatilities on Stagwell 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 Stagwell with a short position of United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and United Community.
Diversification Opportunities for Stagwell and United Community
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stagwell and United is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell 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 Stagwell 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 Stagwell 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 Stagwell i.e., Stagwell and United Community go up and down completely randomly.
Pair Corralation between Stagwell and United Community
Given the investment horizon of 90 days Stagwell is expected to generate 0.76 times more return on investment than United Community. However, Stagwell is 1.32 times less risky than United Community. It trades about 0.45 of its potential returns per unit of risk. United Community Banks, is currently generating about 0.25 per unit of risk. If you would invest 621.00 in Stagwell on September 1, 2024 and sell it today you would earn a total of 165.00 from holding Stagwell or generate 26.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stagwell vs. United Community Banks,
Performance |
| Timeline |
| Stagwell |
| United Community Banks, |
Stagwell and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stagwell and United Community
The main advantage of trading using opposite Stagwell and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell 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.| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications Corp |
| United Community vs. Boston Omaha Corp | United Community vs. ServiceNow | United Community vs. WiMi Hologram Cloud | United Community vs. Stagwell |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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