Correlation Between United Bancorporation and Nmb Financial
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Nmb Financial 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 Nmb Financial 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 Nmb Financial Corp, you can compare the effects of market volatilities on United Bancorporation and Nmb Financial 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 Nmb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Nmb Financial.
Diversification Opportunities for United Bancorporation and Nmb Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Nmb is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Nmb Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nmb Financial Corp 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 Nmb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nmb Financial Corp has no effect on the direction of United Bancorporation i.e., United Bancorporation and Nmb Financial go up and down completely randomly.
Pair Corralation between United Bancorporation and Nmb Financial
Given the investment horizon of 90 days United Bancorporation is expected to generate 1.43 times less return on investment than Nmb Financial. In addition to that, United Bancorporation is 1.03 times more volatile than Nmb Financial Corp. It trades about 0.14 of its total potential returns per unit of risk. Nmb Financial Corp is currently generating about 0.21 per unit of volatility. If you would invest 870.00 in Nmb Financial Corp on September 3, 2024 and sell it today you would earn a total of 530.00 from holding Nmb Financial Corp or generate 60.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.89% |
| Values | Daily Returns |
United Bancorp. of vs. Nmb Financial Corp
Performance |
| Timeline |
| United Bancorporation |
| Nmb Financial Corp |
United Bancorporation and Nmb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Nmb Financial
The main advantage of trading using opposite United Bancorporation and Nmb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Nmb Financial 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 Nmb Financial will offset losses from the drop in Nmb Financial's long position.| United Bancorporation vs. MF Bancorp | United Bancorporation vs. Merchants Marine Bancorp | United Bancorporation vs. MNB Holdings Corp | United Bancorporation vs. Security Federal |
| Nmb Financial vs. First IC | Nmb Financial vs. Merchants Marine Bancorp | Nmb Financial vs. United Bancorporation of | Nmb Financial vs. U I Financial |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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