Correlation Between Texas Capital and United Bankshares
Can any of the company-specific risk be diversified away by investing in both Texas Capital 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 Texas Capital and United Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Texas Capital Bancshares and United Bankshares, you can compare the effects of market volatilities on Texas Capital 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 Texas Capital with a short position of United Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Texas Capital and United Bankshares.
Diversification Opportunities for Texas Capital and United Bankshares
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Texas and United is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Texas Capital Bancshares and United Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankshares and Texas Capital 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 Texas Capital Bancshares 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 Texas Capital i.e., Texas Capital and United Bankshares go up and down completely randomly.
Pair Corralation between Texas Capital and United Bankshares
Given the investment horizon of 90 days Texas Capital Bancshares is expected to generate 1.08 times more return on investment than United Bankshares. However, Texas Capital is 1.08 times more volatile than United Bankshares. It trades about 0.06 of its potential returns per unit of risk. United Bankshares is currently generating about 0.04 per unit of risk. If you would invest 6,254 in Texas Capital Bancshares on November 9, 2024 and sell it today you would earn a total of 2,098 from holding Texas Capital Bancshares or generate 33.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Texas Capital Bancshares vs. United Bankshares
Performance |
| Timeline |
| Texas Capital Bancshares |
| United Bankshares |
Texas Capital and United Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Texas Capital and United Bankshares
The main advantage of trading using opposite Texas Capital and United Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Capital 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.| Texas Capital vs. Heartland Financial USA | Texas Capital vs. Heritage Commerce Corp | Texas Capital vs. Business First Bancshares | Texas Capital vs. German American 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |