Correlation Between Uwharrie Capital and Farmers Bank
Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital and Farmers Bank 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 Farmers Bank 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 The Farmers Bank, you can compare the effects of market volatilities on Uwharrie Capital and Farmers Bank 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 Farmers Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Farmers Bank.
Diversification Opportunities for Uwharrie Capital and Farmers Bank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Uwharrie and Farmers is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and The Farmers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bank 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 Farmers Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bank has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Farmers Bank go up and down completely randomly.
Pair Corralation between Uwharrie Capital and Farmers Bank
Given the investment horizon of 90 days Uwharrie Capital Corp is expected to generate 1.0 times more return on investment than Farmers Bank. However, Uwharrie Capital is 1.0 times more volatile than The Farmers Bank. It trades about 0.03 of its potential returns per unit of risk. The Farmers Bank is currently generating about 0.0 per unit of risk. If you would invest 700.00 in Uwharrie Capital Corp on September 3, 2024 and sell it today you would earn a total of 140.00 from holding Uwharrie Capital Corp or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.03% |
| Values | Daily Returns |
Uwharrie Capital Corp vs. The Farmers Bank
Performance |
| Timeline |
| Uwharrie Capital Corp |
| Farmers Bank |
Uwharrie Capital and Farmers Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwharrie Capital and Farmers Bank
The main advantage of trading using opposite Uwharrie Capital and Farmers Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital position performs unexpectedly, Farmers Bank 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 Farmers Bank will offset losses from the drop in Farmers Bank'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 |
| Farmers Bank vs. CIB Marine Bancshares | Farmers Bank vs. F M Bank | Farmers Bank vs. ENB Financial Corp | Farmers Bank vs. First Bankers Trustshares |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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