Correlation Between Kansas City and United Bancorporation

Can any of the company-specific risk be diversified away by investing in both Kansas City and United Bancorporation 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 Kansas City and United Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kansas City Life and United Bancorporation of, you can compare the effects of market volatilities on Kansas City and United Bancorporation 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 Kansas City with a short position of United Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kansas City and United Bancorporation.

Diversification Opportunities for Kansas City and United Bancorporation

-0.27

Correlation Coefficient

Kansas City  United Bancorporation

Very good diversification

The 3 months correlation between Kansas and United is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kansas City Life and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and Kansas City 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 Kansas City Life are associated (or correlated) with United Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancorporation has no effect on the direction of Kansas City i.e., Kansas City and United Bancorporation go up and down completely randomly.

Pair Corralation between Kansas City and United Bancorporation

If you would invest  5,020  in United Bancorporation of on September 24, 2024 and sell it today you would earn a total of  680.00  from holding United Bancorporation of or generate 13.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Kansas City Life  vs.  United Bancorp. of

Kansas City Life

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kansas City Life has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Kansas City is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

United Bancorporation

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Bancorporation of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United Bancorporation sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kansas City and United Bancorporation

The main advantage of trading using opposite Kansas City and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kansas City position performs unexpectedly, United Bancorporation 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 Bancorporation will offset losses from the drop in United Bancorporation's long position.

The idea behind Kansas City Life and United Bancorporation of 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.