Correlation Between United Bancorporation and Virginia National
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Virginia National 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 Virginia National 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 Virginia National Bankshares, you can compare the effects of market volatilities on United Bancorporation and Virginia National 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 Virginia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Virginia National.
Diversification Opportunities for United Bancorporation and Virginia National
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Virginia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of United Bancorporation i.e., United Bancorporation and Virginia National go up and down completely randomly.
Pair Corralation between United Bancorporation and Virginia National
Given the investment horizon of 90 days United Bancorporation of is expected to generate 0.67 times more return on investment than Virginia National. However, United Bancorporation of is 1.49 times less risky than Virginia National. It trades about 0.28 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about 0.08 per unit of risk. If you would invest 5,435 in United Bancorporation of on September 1, 2024 and sell it today you would earn a total of 395.00 from holding United Bancorporation of or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bancorp. of vs. Virginia National Bankshares
Performance |
| Timeline |
| United Bancorporation |
| Virginia National |
United Bancorporation and Virginia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorporation and Virginia National
The main advantage of trading using opposite United Bancorporation and Virginia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Virginia National 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 Virginia National will offset losses from the drop in Virginia National'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 |
| Virginia National vs. Finward Bancorp | Virginia National vs. Community West Bancshares | Virginia National vs. First Financial Northwest | Virginia National vs. Oak Valley 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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