Correlation Between Waterstone Financial and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Waterstone Financial and Univest Pennsylvania 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 Waterstone Financial and Univest Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waterstone Financial and Univest Pennsylvania, you can compare the effects of market volatilities on Waterstone Financial and Univest Pennsylvania 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 Waterstone Financial with a short position of Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waterstone Financial and Univest Pennsylvania.
Diversification Opportunities for Waterstone Financial and Univest Pennsylvania
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Waterstone and Univest is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Waterstone Financial and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania and Waterstone Financial 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 Waterstone Financial are associated (or correlated) with Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Waterstone Financial i.e., Waterstone Financial and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between Waterstone Financial and Univest Pennsylvania
Given the investment horizon of 90 days Waterstone Financial is expected to under-perform the Univest Pennsylvania. But the stock apears to be less risky and, when comparing its historical volatility, Waterstone Financial is 1.0 times less risky than Univest Pennsylvania. The stock trades about -0.01 of its potential returns per unit of risk. The Univest Pennsylvania is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,808 in Univest Pennsylvania on November 2, 2024 and sell it today you would earn a total of 272.00 from holding Univest Pennsylvania or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waterstone Financial vs. Univest Pennsylvania
Performance |
| Timeline |
| Waterstone Financial |
| Univest Pennsylvania |
Waterstone Financial and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waterstone Financial and Univest Pennsylvania
The main advantage of trading using opposite Waterstone Financial and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waterstone Financial position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.| Waterstone Financial vs. National Bank Holdings | Waterstone Financial vs. Community West Bancshares | Waterstone Financial vs. Financial Institutions | Waterstone Financial vs. Kearny Financial Corp |
| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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