Correlation Between Univest Pennsylvania and Old Point
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and Old Point 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 Old Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Old Point Financial, you can compare the effects of market volatilities on Univest Pennsylvania and Old Point 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 Old Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Old Point.
Diversification Opportunities for Univest Pennsylvania and Old Point
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Univest and Old is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Old Point Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Point Financial 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 Old Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Point Financial has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Old Point go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Old Point
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 2.74 times more return on investment than Old Point. However, Univest Pennsylvania is 2.74 times more volatile than Old Point Financial. It trades about 0.22 of its potential returns per unit of risk. Old Point Financial is currently generating about 0.54 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Univest Pennsylvania vs. Old Point Financial
Performance |
| Timeline |
| Univest Pennsylvania |
| Old Point Financial |
Univest Pennsylvania and Old Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Old Point
The main advantage of trading using opposite Univest Pennsylvania and Old Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, Old Point 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 Old Point will offset losses from the drop in Old Point's long position.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| Old Point vs. Affinity Bancshares | Old Point vs. Auburn National Bancorporation | Old Point vs. BayCom Corp | Old Point 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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