Correlation Between United Bancorporation and Santa Cruz
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Santa Cruz 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 Santa Cruz 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 Santa Cruz County, you can compare the effects of market volatilities on United Bancorporation and Santa Cruz 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 Santa Cruz. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Santa Cruz.
Diversification Opportunities for United Bancorporation and Santa Cruz
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Santa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Santa Cruz County in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santa Cruz County 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 Santa Cruz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santa Cruz County has no effect on the direction of United Bancorporation i.e., United Bancorporation and Santa Cruz go up and down completely randomly.
Pair Corralation between United Bancorporation and Santa Cruz
Given the investment horizon of 90 days United Bancorporation of is expected to generate 1.91 times more return on investment than Santa Cruz. However, United Bancorporation is 1.91 times more volatile than Santa Cruz County. It trades about 0.12 of its potential returns per unit of risk. Santa Cruz County is currently generating about 0.2 per unit of risk. If you would invest 4,671 in United Bancorporation of on August 28, 2024 and sell it today you would earn a total of 1,229 from holding United Bancorporation of or generate 26.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
United Bancorp. of vs. Santa Cruz County
Performance |
| Timeline |
| United Bancorporation |
| Santa Cruz County |
United Bancorporation and Santa Cruz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Santa Cruz
The main advantage of trading using opposite United Bancorporation and Santa Cruz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Santa Cruz 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 Santa Cruz will offset losses from the drop in Santa Cruz'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 |
| Santa Cruz vs. Invesco High Income | Santa Cruz vs. Blackrock Muniholdings Ny | Santa Cruz vs. MFS Investment Grade | Santa Cruz vs. Federated Premier Municipal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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