Correlation Between Union Bankshares and Utah Medical
Can any of the company-specific risk be diversified away by investing in both Union Bankshares and Utah Medical 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 Union Bankshares and Utah Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Bankshares and Utah Medical Products, you can compare the effects of market volatilities on Union Bankshares and Utah Medical 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 Union Bankshares with a short position of Utah Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bankshares and Utah Medical.
Diversification Opportunities for Union Bankshares and Utah Medical
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and Utah is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Union Bankshares and Utah Medical Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utah Medical Products and Union 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 Union Bankshares are associated (or correlated) with Utah Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utah Medical Products has no effect on the direction of Union Bankshares i.e., Union Bankshares and Utah Medical go up and down completely randomly.
Pair Corralation between Union Bankshares and Utah Medical
Considering the 90-day investment horizon Union Bankshares is expected to generate 1.35 times more return on investment than Utah Medical. However, Union Bankshares is 1.35 times more volatile than Utah Medical Products. It trades about 0.04 of its potential returns per unit of risk. Utah Medical Products is currently generating about -0.04 per unit of risk. If you would invest 2,183 in Union Bankshares on August 28, 2024 and sell it today you would earn a total of 940.00 from holding Union Bankshares or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bankshares vs. Utah Medical Products
Performance |
| Timeline |
| Union Bankshares |
| Utah Medical Products |
Union Bankshares and Utah Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bankshares and Utah Medical
The main advantage of trading using opposite Union Bankshares and Utah Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bankshares position performs unexpectedly, Utah Medical 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 Utah Medical will offset losses from the drop in Utah Medical's long position.| Union Bankshares vs. Fifth Third Bancorp | Union Bankshares vs. Zions Bancorporation | Union Bankshares vs. Huntington Bancshares Incorporated | Union Bankshares vs. Comerica |
| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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