Correlation Between U I and CMUV Bancorp
Can any of the company-specific risk be diversified away by investing in both U I and CMUV Bancorp 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 U I and CMUV Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U I Financial and CMUV Bancorp, you can compare the effects of market volatilities on U I and CMUV Bancorp 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 U I with a short position of CMUV Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of U I and CMUV Bancorp.
Diversification Opportunities for U I and CMUV Bancorp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIF and CMUV is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding U I Financial and CMUV Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMUV Bancorp and U I 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 U I Financial are associated (or correlated) with CMUV Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMUV Bancorp has no effect on the direction of U I i.e., U I and CMUV Bancorp go up and down completely randomly.
Pair Corralation between U I and CMUV Bancorp
Given the investment horizon of 90 days U I Financial is expected to under-perform the CMUV Bancorp. In addition to that, U I is 1.77 times more volatile than CMUV Bancorp. It trades about -0.2 of its total potential returns per unit of risk. CMUV Bancorp is currently generating about 0.15 per unit of volatility. If you would invest 1,483 in CMUV Bancorp on August 24, 2024 and sell it today you would earn a total of 626.00 from holding CMUV Bancorp or generate 42.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.85% |
| Values | Daily Returns |
U I Financial vs. CMUV Bancorp
Performance |
| Timeline |
| U I Financial |
| CMUV Bancorp |
U I and CMUV Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U I and CMUV Bancorp
The main advantage of trading using opposite U I and CMUV Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U I position performs unexpectedly, CMUV Bancorp 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 CMUV Bancorp will offset losses from the drop in CMUV Bancorp's long position.| U I vs. Standard Bank Group | U I vs. Bank Central Asia | U I vs. PSB Holdings | U I vs. United Overseas Bank |
| CMUV Bancorp vs. Standard Bank Group | CMUV Bancorp vs. Bank Central Asia | CMUV Bancorp vs. PSB Holdings | CMUV Bancorp vs. United Overseas Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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