Correlation Between United Bancorp and Piraeus Financial
Can any of the company-specific risk be diversified away by investing in both United Bancorp and Piraeus 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 Bancorp and Piraeus Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorp and Piraeus Financial Holdings, you can compare the effects of market volatilities on United Bancorp and Piraeus 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 Bancorp with a short position of Piraeus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorp and Piraeus Financial.
Diversification Opportunities for United Bancorp and Piraeus Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Piraeus is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp and Piraeus Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Financial and United Bancorp 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 Bancorp are associated (or correlated) with Piraeus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Financial has no effect on the direction of United Bancorp i.e., United Bancorp and Piraeus Financial go up and down completely randomly.
Pair Corralation between United Bancorp and Piraeus Financial
Given the investment horizon of 90 days United Bancorp is expected to generate 16.5 times less return on investment than Piraeus Financial. But when comparing it to its historical volatility, United Bancorp is 2.06 times less risky than Piraeus Financial. It trades about 0.02 of its potential returns per unit of risk. Piraeus Financial Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Piraeus Financial Holdings on October 14, 2024 and sell it today you would earn a total of 229.00 from holding Piraeus Financial Holdings or generate 152.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 34.27% |
| Values | Daily Returns |
United Bancorp vs. Piraeus Financial Holdings
Performance |
| Timeline |
| United Bancorp |
| Piraeus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Bancorp and Piraeus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorp and Piraeus Financial
The main advantage of trading using opposite United Bancorp and Piraeus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorp position performs unexpectedly, Piraeus 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 Piraeus Financial will offset losses from the drop in Piraeus Financial's long position.| United Bancorp vs. Rhinebeck Bancorp | United Bancorp vs. Shore Bancshares | United Bancorp vs. First Northwest Bancorp | United Bancorp vs. Community West Bancshares |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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