Correlation Between WesBanco and United Bancorp
Can any of the company-specific risk be diversified away by investing in both WesBanco and United Bancorp 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 WesBanco and United Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and United Bancorp, you can compare the effects of market volatilities on WesBanco and United Bancorp 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 WesBanco with a short position of United Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and United Bancorp.
Diversification Opportunities for WesBanco and United Bancorp
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WesBanco and United is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and United Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorp and WesBanco 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 WesBanco are associated (or correlated) with United Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorp has no effect on the direction of WesBanco i.e., WesBanco and United Bancorp go up and down completely randomly.
Pair Corralation between WesBanco and United Bancorp
Assuming the 90 days horizon WesBanco is expected to generate 1.21 times less return on investment than United Bancorp. But when comparing it to its historical volatility, WesBanco is 1.81 times less risky than United Bancorp. It trades about 0.02 of its potential returns per unit of risk. United Bancorp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,271 in United Bancorp on October 14, 2024 and sell it today you would earn a total of 65.00 from holding United Bancorp or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. United Bancorp
Performance |
| Timeline |
| WesBanco |
| United Bancorp |
WesBanco and United Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and United Bancorp
The main advantage of trading using opposite WesBanco and United Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, United Bancorp 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 Bancorp will offset losses from the drop in United Bancorp's long position.| WesBanco vs. Simon Property Group | WesBanco vs. Sonida Senior Living | WesBanco vs. Franklin Credit Management | WesBanco vs. Ameriprise Financial |
| United Bancorp vs. Rhinebeck Bancorp | United Bancorp vs. Shore Bancshares | United Bancorp vs. First Northwest Bancorp | United Bancorp vs. Community West Bancshares |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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