Correlation Between United Bancorporation and Community Investors
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Community Investors 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 United Bancorporation and Community Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorporation of and Community Investors Bancorp, you can compare the effects of market volatilities on United Bancorporation and Community Investors 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 United Bancorporation with a short position of Community Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Community Investors.
Diversification Opportunities for United Bancorporation and Community Investors
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Community is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Community Investors Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Investors and United Bancorporation 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 United Bancorporation of are associated (or correlated) with Community Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Investors has no effect on the direction of United Bancorporation i.e., United Bancorporation and Community Investors go up and down completely randomly.
Pair Corralation between United Bancorporation and Community Investors
If you would invest 5,183 in United Bancorporation of on August 24, 2024 and sell it today you would earn a total of 717.00 from holding United Bancorporation of or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
United Bancorp. of vs. Community Investors Bancorp
Performance |
| Timeline |
| United Bancorporation |
| Community Investors |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Bancorporation and Community Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Community Investors
The main advantage of trading using opposite United Bancorporation and Community Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Community Investors 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 Community Investors will offset losses from the drop in Community Investors' long position.| United Bancorporation vs. Invesco High Income | United Bancorporation vs. Blackrock Muniholdings Ny | United Bancorporation vs. MFS Investment Grade | United Bancorporation vs. Federated Premier Municipal |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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