Correlation Between United Bancorp and William Penn
Can any of the company-specific risk be diversified away by investing in both United Bancorp and William Penn 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 William Penn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorp and William Penn Bancorp, you can compare the effects of market volatilities on United Bancorp and William Penn 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 William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorp and William Penn.
Diversification Opportunities for United Bancorp and William Penn
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and William is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of United Bancorp i.e., United Bancorp and William Penn go up and down completely randomly.
Pair Corralation between United Bancorp and William Penn
Given the investment horizon of 90 days United Bancorp is expected to generate 2.16 times more return on investment than William Penn. However, United Bancorp is 2.16 times more volatile than William Penn Bancorp. It trades about -0.11 of its potential returns per unit of risk. William Penn Bancorp is currently generating about -0.44 per unit of risk. If you would invest 1,443 in United Bancorp on October 14, 2024 and sell it today you would lose (107.00) from holding United Bancorp or give up 7.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bancorp vs. William Penn Bancorp
Performance |
| Timeline |
| United Bancorp |
| William Penn Bancorp |
United Bancorp and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bancorp and William Penn
The main advantage of trading using opposite United Bancorp and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorp position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn'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 |
| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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