Correlation Between Washington Federal and United Community
Can any of the company-specific risk be diversified away by investing in both Washington Federal and United Community 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 Washington Federal and United Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and United Community Banks, you can compare the effects of market volatilities on Washington Federal and United Community 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 Washington Federal with a short position of United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and United Community.
Diversification Opportunities for Washington Federal and United Community
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Washington and United is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and United Community Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Community Banks and Washington Federal 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 Washington Federal are associated (or correlated) with United Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Community Banks has no effect on the direction of Washington Federal i.e., Washington Federal and United Community go up and down completely randomly.
Pair Corralation between Washington Federal and United Community
If you would invest 2,434 in United Community Banks on August 28, 2024 and sell it today you would earn a total of 0.00 from holding United Community Banks or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Washington Federal vs. United Community Banks
Performance |
| Timeline |
| Washington Federal |
| United Community Banks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Washington Federal and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and United Community
The main advantage of trading using opposite Washington Federal and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, United Community 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 United Community will offset losses from the drop in United Community's long position.| Washington Federal vs. Capital One Financial | Washington Federal vs. Capital One Financial | Washington Federal vs. Bank of America |
| United Community vs. Pinnacle Financial Partners | United Community vs. Wintrust Financial Corp | United Community vs. Heartland Financial USA | United Community vs. OceanFirst Financial Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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