Correlation Between Uwharrie Capital and Two Rivers
Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital and Two Rivers 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 Two Rivers 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 Two Rivers Financial, you can compare the effects of market volatilities on Uwharrie Capital and Two Rivers 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 Two Rivers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Two Rivers.
Diversification Opportunities for Uwharrie Capital and Two Rivers
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uwharrie and Two is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Two Rivers Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Rivers Financial 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 Two Rivers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Rivers Financial has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Two Rivers go up and down completely randomly.
Pair Corralation between Uwharrie Capital and Two Rivers
Given the investment horizon of 90 days Uwharrie Capital Corp is expected to generate 1.76 times more return on investment than Two Rivers. However, Uwharrie Capital is 1.76 times more volatile than Two Rivers Financial. It trades about 0.03 of its potential returns per unit of risk. Two Rivers Financial is currently generating about -0.02 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 | Significant |
| Accuracy | 77.88% |
| Values | Daily Returns |
Uwharrie Capital Corp vs. Two Rivers Financial
Performance |
| Timeline |
| Uwharrie Capital Corp |
| Two Rivers Financial |
Uwharrie Capital and Two Rivers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwharrie Capital and Two Rivers
The main advantage of trading using opposite Uwharrie Capital and Two Rivers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital position performs unexpectedly, Two Rivers 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 Two Rivers will offset losses from the drop in Two Rivers' 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 |
| Two Rivers vs. First Capital | Two Rivers vs. Civista Bancshares | Two Rivers vs. Finward Bancorp | Two Rivers vs. Heritage Financial |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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