Correlation Between United Community and National Bankshares
Can any of the company-specific risk be diversified away by investing in both United Community and National Bankshares 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 Community and National Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Community Banks and National Bankshares, you can compare the effects of market volatilities on United Community and National Bankshares 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 Community with a short position of National Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Community and National Bankshares.
Diversification Opportunities for United Community and National Bankshares
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and National is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding United Community Banks and National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bankshares and United Community 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 Community Banks are associated (or correlated) with National Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bankshares has no effect on the direction of United Community i.e., United Community and National Bankshares go up and down completely randomly.
Pair Corralation between United Community and National Bankshares
If you would invest 2,935 in National Bankshares on August 31, 2024 and sell it today you would earn a total of 247.00 from holding National Bankshares or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
United Community Banks vs. National Bankshares
Performance |
| Timeline |
| United Community Banks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| National Bankshares |
United Community and National Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Community and National Bankshares
The main advantage of trading using opposite United Community and National Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Community position performs unexpectedly, National Bankshares 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 National Bankshares will offset losses from the drop in National Bankshares' long position.| United Community vs. ServisFirst Bancshares | United Community vs. Home BancShares | United Community vs. CNB Financial | United Community vs. Univest Pennsylvania |
| National Bankshares vs. KeyCorp | National Bankshares vs. Comerica | National Bankshares vs. First Horizon National | National Bankshares vs. Western Alliance Bancorporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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