Correlation Between United Bancorp and Village Bank
Can any of the company-specific risk be diversified away by investing in both United Bancorp and Village 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 Village 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 Village Bank and, you can compare the effects of market volatilities on United Bancorp and Village 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 Village Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorp and Village Bank.
Diversification Opportunities for United Bancorp and Village Bank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Village is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp and Village Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village 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 Village Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Bank has no effect on the direction of United Bancorp i.e., United Bancorp and Village Bank go up and down completely randomly.
Pair Corralation between United Bancorp and Village Bank
Given the investment horizon of 90 days United Bancorp is expected to under-perform the Village Bank. In addition to that, United Bancorp is 2.24 times more volatile than Village Bank and. It trades about -0.11 of its total potential returns per unit of risk. Village Bank and is currently generating about 0.05 per unit of volatility. If you would invest 7,773 in Village Bank and on October 14, 2024 and sell it today you would earn a total of 67.00 from holding Village Bank and or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.42% |
| Values | Daily Returns |
United Bancorp vs. Village Bank and
Performance |
| Timeline |
| United Bancorp |
| Village Bank |
United Bancorp and Village Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorp and Village Bank
The main advantage of trading using opposite United Bancorp and Village Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorp position performs unexpectedly, Village 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 Village Bank will offset losses from the drop in Village 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 |
| Village Bank vs. Prime Meridian Holding | Village Bank vs. William Penn Bancorp | Village Bank vs. Pathfinder Bancorp | Village Bank vs. Magyar 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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