Correlation Between United Bankshares and Commerce Bancshares
Can any of the company-specific risk be diversified away by investing in both United Bankshares and Commerce Bancshares 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 Bankshares and Commerce Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankshares and Commerce Bancshares, you can compare the effects of market volatilities on United Bankshares and Commerce Bancshares 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 Bankshares with a short position of Commerce Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankshares and Commerce Bancshares.
Diversification Opportunities for United Bankshares and Commerce Bancshares
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and Commerce is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding United Bankshares and Commerce Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Bancshares and United Bankshares 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 Bankshares are associated (or correlated) with Commerce Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Bancshares has no effect on the direction of United Bankshares i.e., United Bankshares and Commerce Bancshares go up and down completely randomly.
Pair Corralation between United Bankshares and Commerce Bancshares
Given the investment horizon of 90 days United Bankshares is expected to generate 1.23 times more return on investment than Commerce Bancshares. However, United Bankshares is 1.23 times more volatile than Commerce Bancshares. It trades about 0.02 of its potential returns per unit of risk. Commerce Bancshares is currently generating about 0.03 per unit of risk. If you would invest 3,772 in United Bankshares on August 28, 2024 and sell it today you would earn a total of 557.00 from holding United Bankshares or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bankshares vs. Commerce Bancshares
Performance |
| Timeline |
| United Bankshares |
| Commerce Bancshares |
United Bankshares and Commerce Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankshares and Commerce Bancshares
The main advantage of trading using opposite United Bankshares and Commerce Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankshares position performs unexpectedly, Commerce Bancshares 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 Commerce Bancshares will offset losses from the drop in Commerce Bancshares' long position.| United Bankshares vs. Peoples Bancorp | United Bankshares vs. Eagle Bancorp | United Bankshares vs. Northrim BanCorp | United Bankshares vs. Pacific Premier Bancorp |
| Commerce Bancshares vs. BOK Financial | Commerce Bancshares vs. Texas Capital Bancshares | Commerce Bancshares vs. United Bankshares | Commerce Bancshares vs. Prosperity Bancshares |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |