Correlation Between Utah Medical and Union Bankshares
Can any of the company-specific risk be diversified away by investing in both Utah Medical and Union 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 Utah Medical and Union Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Utah Medical Products and Union Bankshares, you can compare the effects of market volatilities on Utah Medical and Union 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 Utah Medical with a short position of Union Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utah Medical and Union Bankshares.
Diversification Opportunities for Utah Medical and Union Bankshares
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Utah and Union is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and Union Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bankshares and Utah Medical 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 Utah Medical Products are associated (or correlated) with Union Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bankshares has no effect on the direction of Utah Medical i.e., Utah Medical and Union Bankshares go up and down completely randomly.
Pair Corralation between Utah Medical and Union Bankshares
Given the investment horizon of 90 days Utah Medical Products is expected to under-perform the Union Bankshares. But the stock apears to be less risky and, when comparing its historical volatility, Utah Medical Products is 1.34 times less risky than Union Bankshares. The stock trades about -0.04 of its potential returns per unit of risk. The Union Bankshares is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,197 in Union Bankshares on August 24, 2024 and sell it today you would earn a total of 913.00 from holding Union Bankshares or generate 41.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Utah Medical Products vs. Union Bankshares
Performance |
| Timeline |
| Utah Medical Products |
| Union Bankshares |
Utah Medical and Union Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Utah Medical and Union Bankshares
The main advantage of trading using opposite Utah Medical and Union Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Utah Medical position performs unexpectedly, Union 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 Union Bankshares will offset losses from the drop in Union Bankshares' long position.| Utah Medical vs. Precision Optics, | Utah Medical vs. Repro Med Systems | Utah Medical vs. InfuSystems Holdings | Utah Medical vs. Milestone Scientific |
| Union Bankshares vs. Home Bancorp | Union Bankshares vs. Rhinebeck Bancorp | Union Bankshares vs. LINKBANCORP | Union Bankshares vs. Magyar Bancorp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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