Correlation Between Uwharrie Capital and Western Capital
Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital and Western Capital 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 Western Capital 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 Western Capital Resources, you can compare the effects of market volatilities on Uwharrie Capital and Western Capital 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 Western Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Western Capital.
Diversification Opportunities for Uwharrie Capital and Western Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Uwharrie and Western is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Western Capital Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Capital Resources 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 Western Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Capital Resources has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Western Capital go up and down completely randomly.
Pair Corralation between Uwharrie Capital and Western Capital
Given the investment horizon of 90 days Uwharrie Capital is expected to generate 2.95 times less return on investment than Western Capital. But when comparing it to its historical volatility, Uwharrie Capital Corp is 1.23 times less risky than Western Capital. It trades about 0.13 of its potential returns per unit of risk. Western Capital Resources is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Western Capital Resources on August 30, 2024 and sell it today you would earn a total of 128.00 from holding Western Capital Resources or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uwharrie Capital Corp vs. Western Capital Resources
Performance |
| Timeline |
| Uwharrie Capital Corp |
| Western Capital Resources |
Uwharrie Capital and Western Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwharrie Capital and Western Capital
The main advantage of trading using opposite Uwharrie Capital and Western Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital position performs unexpectedly, Western Capital 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 Western Capital will offset losses from the drop in Western Capital'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 |
| Western Capital vs. Evgo Inc | Western Capital vs. Ulta Beauty | Western Capital vs. Best Buy Co | Western Capital vs. RH |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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