Correlation Between Uwharrie Capital and Commerzbank
Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital and Commerzbank 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 Uwharrie Capital and Commerzbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uwharrie Capital Corp and Commerzbank AG PK, you can compare the effects of market volatilities on Uwharrie Capital and Commerzbank 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 Uwharrie Capital with a short position of Commerzbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Commerzbank.
Diversification Opportunities for Uwharrie Capital and Commerzbank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uwharrie and Commerzbank is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Commerzbank AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerzbank AG PK and Uwharrie Capital 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 Uwharrie Capital Corp are associated (or correlated) with Commerzbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerzbank AG PK has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Commerzbank go up and down completely randomly.
Pair Corralation between Uwharrie Capital and Commerzbank
Given the investment horizon of 90 days Uwharrie Capital is expected to generate 1.79 times less return on investment than Commerzbank. But when comparing it to its historical volatility, Uwharrie Capital Corp is 1.53 times less risky than Commerzbank. It trades about 0.05 of its potential returns per unit of risk. Commerzbank AG PK is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,156 in Commerzbank AG PK on September 2, 2024 and sell it today you would earn a total of 382.00 from holding Commerzbank AG PK or generate 33.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.74% |
| Values | Daily Returns |
Uwharrie Capital Corp vs. Commerzbank AG PK
Performance |
| Timeline |
| Uwharrie Capital Corp |
| Commerzbank AG PK |
Uwharrie Capital and Commerzbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwharrie Capital and Commerzbank
The main advantage of trading using opposite Uwharrie Capital and Commerzbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital position performs unexpectedly, Commerzbank 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 Commerzbank will offset losses from the drop in Commerzbank's long position.| Uwharrie Capital vs. ENB Financial Corp | Uwharrie Capital vs. First Reliance Bancshares | Uwharrie Capital vs. Oak Ridge Financial | Uwharrie Capital vs. Glen Burnie Bancorp |
| Commerzbank vs. Piraeus Bank SA | Commerzbank vs. Turkiye Garanti Bankasi | Commerzbank vs. Uwharrie Capital 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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