Correlation Between US Metro and United Bancorporation
Can any of the company-specific risk be diversified away by investing in both US Metro and United Bancorporation 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 US Metro and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Metro Bancorp and United Bancorporation of, you can compare the effects of market volatilities on US Metro and United Bancorporation 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 US Metro with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Metro and United Bancorporation.
Diversification Opportunities for US Metro and United Bancorporation
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USMT and United is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding US Metro Bancorp and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and US Metro 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 US Metro Bancorp are associated (or correlated) with United Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorporation has no effect on the direction of US Metro i.e., US Metro and United Bancorporation go up and down completely randomly.
Pair Corralation between US Metro and United Bancorporation
If you would invest 5,480 in United Bancorporation of on August 28, 2024 and sell it today you would earn a total of 420.00 from holding United Bancorporation of or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
US Metro Bancorp vs. United Bancorp. of
Performance |
| Timeline |
| US Metro Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United Bancorporation |
US Metro and United Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Metro and United Bancorporation
The main advantage of trading using opposite US Metro and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Metro position performs unexpectedly, United Bancorporation 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 United Bancorporation will offset losses from the drop in United Bancorporation's long position.| US Metro vs. CMUV Bancorp | US Metro vs. Pioneer Bankcorp | US Metro vs. Summit Bancshares | US Metro vs. Liberty Northwest Bancorp |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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