Correlation Between Univest Pennsylvania and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and IF 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 Univest Pennsylvania and IF Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and IF Bancorp, you can compare the effects of market volatilities on Univest Pennsylvania and IF 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 Univest Pennsylvania with a short position of IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and IF Bancorp.
Diversification Opportunities for Univest Pennsylvania and IF Bancorp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Univest and IROQ is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and IF Bancorp go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and IF Bancorp
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.25 times more return on investment than IF Bancorp. However, Univest Pennsylvania is 1.25 times more volatile than IF Bancorp. It trades about 0.22 of its potential returns per unit of risk. IF Bancorp is currently generating about 0.05 per unit of risk. If you would invest 2,761 in Univest Pennsylvania on September 2, 2024 and sell it today you would earn a total of 415.00 from holding Univest Pennsylvania or generate 15.03% 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. IF Bancorp
Performance |
| Timeline |
| Univest Pennsylvania |
| IF Bancorp |
Univest Pennsylvania and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and IF Bancorp
The main advantage of trading using opposite Univest Pennsylvania and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, IF 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 IF Bancorp will offset losses from the drop in IF Bancorp's long position.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| IF Bancorp vs. Affinity Bancshares | IF Bancorp vs. Auburn National Bancorporation | IF Bancorp vs. BayCom Corp | IF Bancorp vs. First Community |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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