Correlation Between Univest Pennsylvania and Exchange Bankshares
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and Exchange 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 Univest Pennsylvania and Exchange Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Exchange Bankshares, you can compare the effects of market volatilities on Univest Pennsylvania and Exchange 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 Univest Pennsylvania with a short position of Exchange Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Exchange Bankshares.
Diversification Opportunities for Univest Pennsylvania and Exchange Bankshares
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Univest and Exchange is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares and Univest Pennsylvania 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 Univest Pennsylvania are associated (or correlated) with Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Exchange Bankshares go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Exchange Bankshares
Given the investment horizon of 90 days Univest Pennsylvania is expected to under-perform the Exchange Bankshares. In addition to that, Univest Pennsylvania is 1.31 times more volatile than Exchange Bankshares. It trades about -0.3 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.3 per unit of volatility. If you would invest 4,501 in Exchange Bankshares on October 9, 2024 and sell it today you would earn a total of 289.00 from holding Exchange Bankshares or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Exchange Bankshares
Performance |
| Timeline |
| Univest Pennsylvania |
| Exchange Bankshares |
Univest Pennsylvania and Exchange Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Exchange Bankshares
The main advantage of trading using opposite Univest Pennsylvania and Exchange Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, Exchange 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 Exchange Bankshares will offset losses from the drop in Exchange Bankshares' long position.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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