Correlation Between United Bancorp and Rhinebeck Bancorp
Can any of the company-specific risk be diversified away by investing in both United Bancorp and Rhinebeck Bancorp 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 Rhinebeck Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorp and Rhinebeck Bancorp, you can compare the effects of market volatilities on United Bancorp and Rhinebeck Bancorp 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 Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorp and Rhinebeck Bancorp.
Diversification Opportunities for United Bancorp and Rhinebeck Bancorp
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Rhinebeck is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp 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 Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of United Bancorp i.e., United Bancorp and Rhinebeck Bancorp go up and down completely randomly.
Pair Corralation between United Bancorp and Rhinebeck Bancorp
Given the investment horizon of 90 days United Bancorp is expected to generate 1.2 times more return on investment than Rhinebeck Bancorp. However, United Bancorp is 1.2 times more volatile than Rhinebeck Bancorp. It trades about 0.02 of its potential returns per unit of risk. Rhinebeck Bancorp is currently generating about 0.01 per unit of risk. If you would invest 1,271 in United Bancorp on October 14, 2024 and sell it today you would earn a total of 65.00 from holding United Bancorp or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bancorp vs. Rhinebeck Bancorp
Performance |
| Timeline |
| United Bancorp |
| Rhinebeck Bancorp |
United Bancorp and Rhinebeck Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorp and Rhinebeck Bancorp
The main advantage of trading using opposite United Bancorp and Rhinebeck Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorp position performs unexpectedly, Rhinebeck Bancorp 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 Rhinebeck Bancorp will offset losses from the drop in Rhinebeck Bancorp'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 |
| Rhinebeck Bancorp vs. Home Federal Bancorp | Rhinebeck Bancorp vs. Community West Bancshares | Rhinebeck Bancorp vs. Magyar Bancorp | Rhinebeck Bancorp vs. First Financial Northwest |
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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