Correlation Between United Bankshares and LINKBANCORP
Can any of the company-specific risk be diversified away by investing in both United Bankshares and LINKBANCORP 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 LINKBANCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bankshares and LINKBANCORP, you can compare the effects of market volatilities on United Bankshares and LINKBANCORP 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 LINKBANCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bankshares and LINKBANCORP.
Diversification Opportunities for United Bankshares and LINKBANCORP
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and LINKBANCORP is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Bankshares and LINKBANCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINKBANCORP 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 LINKBANCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINKBANCORP has no effect on the direction of United Bankshares i.e., United Bankshares and LINKBANCORP go up and down completely randomly.
Pair Corralation between United Bankshares and LINKBANCORP
Given the investment horizon of 90 days United Bankshares is expected to generate 0.82 times more return on investment than LINKBANCORP. However, United Bankshares is 1.21 times less risky than LINKBANCORP. It trades about 0.08 of its potential returns per unit of risk. LINKBANCORP is currently generating about -0.19 per unit of risk. If you would invest 3,755 in United Bankshares on November 1, 2024 and sell it today you would earn a total of 76.00 from holding United Bankshares or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Bankshares vs. LINKBANCORP
Performance |
| Timeline |
| United Bankshares |
| LINKBANCORP |
United Bankshares and LINKBANCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Bankshares and LINKBANCORP
The main advantage of trading using opposite United Bankshares and LINKBANCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bankshares position performs unexpectedly, LINKBANCORP 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 LINKBANCORP will offset losses from the drop in LINKBANCORP's long position.| United Bankshares vs. Peoples Bancorp | United Bankshares vs. Eagle Bancorp | United Bankshares vs. Northrim BanCorp | United Bankshares vs. Pacific Premier Bancorp |
| LINKBANCORP vs. Home Federal Bancorp | LINKBANCORP vs. Lake Shore Bancorp | LINKBANCORP vs. Community West Bancshares | LINKBANCORP 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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