Correlation Between United Overseas and FS Bancorp
Can any of the company-specific risk be diversified away by investing in both United Overseas and FS 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 United Overseas and FS Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and FS Bancorp, you can compare the effects of market volatilities on United Overseas and FS 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 United Overseas with a short position of FS Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and FS Bancorp.
Diversification Opportunities for United Overseas and FS Bancorp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and FXLG is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank and FS Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Bancorp and United Overseas 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 Overseas Bank are associated (or correlated) with FS Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Bancorp has no effect on the direction of United Overseas i.e., United Overseas and FS Bancorp go up and down completely randomly.
Pair Corralation between United Overseas and FS Bancorp
Assuming the 90 days horizon United Overseas is expected to generate 1.1 times less return on investment than FS Bancorp. In addition to that, United Overseas is 1.07 times more volatile than FS Bancorp. It trades about 0.14 of its total potential returns per unit of risk. FS Bancorp is currently generating about 0.16 per unit of volatility. If you would invest 2,429 in FS Bancorp on August 29, 2024 and sell it today you would earn a total of 721.00 from holding FS Bancorp or generate 29.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 70.16% |
| Values | Daily Returns |
United Overseas Bank vs. FS Bancorp
Performance |
| Timeline |
| United Overseas Bank |
| FS Bancorp |
United Overseas and FS Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Overseas and FS Bancorp
The main advantage of trading using opposite United Overseas and FS Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas position performs unexpectedly, FS 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 FS Bancorp will offset losses from the drop in FS Bancorp's long position.| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
| FS Bancorp vs. Eastern Michigan Financial | FS Bancorp vs. Grand River Commerce | FS Bancorp vs. Bank of Botetourt | FS Bancorp vs. AmeriServ Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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