Correlation Between Victory Bancorp and U I
Can any of the company-specific risk be diversified away by investing in both Victory Bancorp and U I 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 Victory Bancorp and U I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Victory Bancorp and U I Financial, you can compare the effects of market volatilities on Victory Bancorp and U I 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 Victory Bancorp with a short position of U I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Bancorp and U I.
Diversification Opportunities for Victory Bancorp and U I
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victory and UNIF is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Victory Bancorp and U I Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U I Financial and Victory Bancorp 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 The Victory Bancorp are associated (or correlated) with U I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U I Financial has no effect on the direction of Victory Bancorp i.e., Victory Bancorp and U I go up and down completely randomly.
Pair Corralation between Victory Bancorp and U I
Given the investment horizon of 90 days The Victory Bancorp is expected to generate 1.07 times more return on investment than U I. However, Victory Bancorp is 1.07 times more volatile than U I Financial. It trades about -0.03 of its potential returns per unit of risk. U I Financial is currently generating about -0.12 per unit of risk. If you would invest 1,486 in The Victory Bancorp on August 28, 2024 and sell it today you would lose (361.00) from holding The Victory Bancorp or give up 24.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.79% |
| Values | Daily Returns |
The Victory Bancorp vs. U I Financial
Performance |
| Timeline |
| Victory Bancorp |
| U I Financial |
Victory Bancorp and U I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Bancorp and U I
The main advantage of trading using opposite Victory Bancorp and U I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Bancorp position performs unexpectedly, U I 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 U I will offset losses from the drop in U I's long position.The idea behind The Victory Bancorp and U I Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| U I vs. CIB Marine Bancshares | U I vs. Heartland Banccorp | U I vs. United Bancorporation of | U I vs. Harbor Bankshares |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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