Correlation Between VersaBank and BankUnited
Can any of the company-specific risk be diversified away by investing in both VersaBank and BankUnited 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 VersaBank and BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and BankUnited, you can compare the effects of market volatilities on VersaBank and BankUnited 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 VersaBank with a short position of BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and BankUnited.
Diversification Opportunities for VersaBank and BankUnited
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VersaBank and BankUnited is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited and VersaBank 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 VersaBank are associated (or correlated) with BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of VersaBank i.e., VersaBank and BankUnited go up and down completely randomly.
Pair Corralation between VersaBank and BankUnited
Given the investment horizon of 90 days VersaBank is expected to generate 0.55 times more return on investment than BankUnited. However, VersaBank is 1.81 times less risky than BankUnited. It trades about 0.43 of its potential returns per unit of risk. BankUnited is currently generating about 0.23 per unit of risk. If you would invest 1,482 in VersaBank on August 30, 2024 and sell it today you would earn a total of 312.00 from holding VersaBank or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. BankUnited
Performance |
| Timeline |
| VersaBank |
| BankUnited |
VersaBank and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and BankUnited
The main advantage of trading using opposite VersaBank and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| VersaBank vs. Mountain Commerce Bancorp | VersaBank vs. American Riviera Bank | VersaBank vs. Home Federal Bancorp | VersaBank vs. Prime Meridian Holding |
| BankUnited vs. SVB T Corp | BankUnited vs. First Capital | BankUnited vs. Pioneer Bankcorp | BankUnited vs. Liberty Northwest Bancorp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |