Correlation Between United Bancorporation and Oconee Financial
Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Oconee Financial 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 United Bancorporation and Oconee Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Bancorporation of and Oconee Financial, you can compare the effects of market volatilities on United Bancorporation and Oconee Financial 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 United Bancorporation with a short position of Oconee Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Oconee Financial.
Diversification Opportunities for United Bancorporation and Oconee Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Oconee is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Oconee Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oconee Financial and United 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 United Bancorporation of are associated (or correlated) with Oconee Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oconee Financial has no effect on the direction of United Bancorporation i.e., United Bancorporation and Oconee Financial go up and down completely randomly.
Pair Corralation between United Bancorporation and Oconee Financial
Given the investment horizon of 90 days United Bancorporation of is expected to generate 4.88 times more return on investment than Oconee Financial. However, United Bancorporation is 4.88 times more volatile than Oconee Financial. It trades about 0.14 of its potential returns per unit of risk. Oconee Financial is currently generating about 0.1 per unit of risk. If you would invest 5,112 in United Bancorporation of on September 5, 2024 and sell it today you would earn a total of 564.00 from holding United Bancorporation of or generate 11.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
United Bancorp. of vs. Oconee Financial
Performance |
Timeline |
United Bancorporation |
Oconee Financial |
United Bancorporation and Oconee Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Bancorporation and Oconee Financial
The main advantage of trading using opposite United Bancorporation and Oconee Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Bancorporation position performs unexpectedly, Oconee Financial 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 Oconee Financial will offset losses from the drop in Oconee Financial's long position.United Bancorporation vs. Western Asset Global | United Bancorporation vs. Invesco Trust For | United Bancorporation vs. Logan Ridge Finance | United Bancorporation vs. Invesco Advantage MIT |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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