Correlation Between Zions Bancorporation and United Community
Can any of the company-specific risk be diversified away by investing in both Zions Bancorporation 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 Zions Bancorporation and United Community into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zions Bancorporation and United Community Banks,, you can compare the effects of market volatilities on Zions Bancorporation 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 Zions Bancorporation with a short position of United Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zions Bancorporation and United Community.
Diversification Opportunities for Zions Bancorporation and United Community
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Zions and United is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Zions Bancorp. 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 Zions Bancorporation 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 Zions Bancorporation 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 Zions Bancorporation i.e., Zions Bancorporation and United Community go up and down completely randomly.
Pair Corralation between Zions Bancorporation and United Community
Given the investment horizon of 90 days Zions Bancorporation is expected to generate 1.48 times more return on investment than United Community. However, Zions Bancorporation is 1.48 times more volatile than United Community Banks,. It trades about 0.04 of its potential returns per unit of risk. United Community Banks, is currently generating about 0.01 per unit of risk. If you would invest 4,448 in Zions Bancorporation on August 26, 2024 and sell it today you would earn a total of 1,610 from holding Zions Bancorporation or generate 36.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zions Bancorp. vs. United Community Banks,
Performance |
| Timeline |
| Zions Bancorporation |
| United Community Banks, |
Zions Bancorporation and United Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zions Bancorporation and United Community
The main advantage of trading using opposite Zions Bancorporation and United Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zions Bancorporation 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.| Zions Bancorporation vs. KeyCorp | Zions Bancorporation vs. Comerica | Zions Bancorporation vs. First Horizon National | Zions Bancorporation vs. Western Alliance Bancorporation |
| United Community vs. Fifth Third Bancorp | United Community vs. Zions Bancorporation | United Community vs. Huntington Bancshares Incorporated | United Community vs. PNC Financial Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |