Correlation Between United Bancorp and National Bank
Can any of the company-specific risk be diversified away by investing in both United Bancorp and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorp and National Bank of, you can compare the effects of market volatilities on United Bancorp and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorp and National Bank.
Diversification Opportunities for United Bancorp and National Bank
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and National is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of United Bancorp i.e., United Bancorp and National Bank go up and down completely randomly.
Pair Corralation between United Bancorp and National Bank
Given the investment horizon of 90 days United Bancorp is expected to generate 4.29 times less return on investment than National Bank. But when comparing it to its historical volatility, United Bancorp is 1.26 times less risky than National Bank. It trades about 0.02 of its potential returns per unit of risk. National Bank of is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 441.00 in National Bank of on October 14, 2024 and sell it today you would earn a total of 378.00 from holding National Bank of or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bancorp vs. National Bank of
Performance |
| Timeline |
| United Bancorp |
| National Bank |
United Bancorp and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorp and National Bank
The main advantage of trading using opposite United Bancorp and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorp position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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