Correlation Between Univest Pennsylvania and Waterstone Financial
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and Waterstone Financial 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 Waterstone Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Waterstone Financial, you can compare the effects of market volatilities on Univest Pennsylvania and Waterstone Financial 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 Waterstone Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Waterstone Financial.
Diversification Opportunities for Univest Pennsylvania and Waterstone Financial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Univest and Waterstone is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Waterstone Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waterstone 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 Waterstone Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waterstone Financial has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Waterstone Financial go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Waterstone Financial
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.23 times more return on investment than Waterstone Financial. However, Univest Pennsylvania is 1.23 times more volatile than Waterstone Financial. It trades about 0.18 of its potential returns per unit of risk. Waterstone Financial is currently generating about 0.07 per unit of risk. If you would invest 2,716 in Univest Pennsylvania on August 23, 2024 and sell it today you would earn a total of 376.00 from holding Univest Pennsylvania or generate 13.84% 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. Waterstone Financial
Performance |
| Timeline |
| Univest Pennsylvania |
| Waterstone Financial |
Univest Pennsylvania and Waterstone Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Univest Pennsylvania and Waterstone Financial
The main advantage of trading using opposite Univest Pennsylvania and Waterstone Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, Waterstone Financial 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 Waterstone Financial will offset losses from the drop in Waterstone Financial's long position.| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |