Correlation Between United Bancorporation and Quaint Oak
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Quaint Oak 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 Quaint Oak 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 Quaint Oak Bancorp, you can compare the effects of market volatilities on United Bancorporation and Quaint Oak 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 Quaint Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Quaint Oak.
Diversification Opportunities for United Bancorporation and Quaint Oak
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Quaint is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Quaint Oak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaint Oak Bancorp 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 Quaint Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaint Oak Bancorp has no effect on the direction of United Bancorporation i.e., United Bancorporation and Quaint Oak go up and down completely randomly.
Pair Corralation between United Bancorporation and Quaint Oak
Given the investment horizon of 90 days United Bancorporation of is expected to generate 0.57 times more return on investment than Quaint Oak. However, United Bancorporation of is 1.75 times less risky than Quaint Oak. It trades about 0.09 of its potential returns per unit of risk. Quaint Oak Bancorp is currently generating about -0.04 per unit of risk. If you would invest 3,583 in United Bancorporation of on August 29, 2024 and sell it today you would earn a total of 2,267 from holding United Bancorporation of or generate 63.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 73.11% |
| Values | Daily Returns |
United Bancorp. of vs. Quaint Oak Bancorp
Performance |
| Timeline |
| United Bancorporation |
| Quaint Oak Bancorp |
United Bancorporation and Quaint Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Quaint Oak
The main advantage of trading using opposite United Bancorporation and Quaint Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Quaint Oak 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 Quaint Oak will offset losses from the drop in Quaint Oak'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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