Correlation Between United Bancorporation and Tri County

Can any of the company-specific risk be diversified away by investing in both United Bancorporation and Tri County 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 Tri County 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 Tri County Financial Group, you can compare the effects of market volatilities on United Bancorporation and Tri County 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 Tri County. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Bancorporation and Tri County.

Diversification Opportunities for United Bancorporation and Tri County

0.47

Correlation Coefficient

United Bancorporation  Tri County

Very weak diversification

The 3 months correlation between United and Tri is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Tri County Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri County 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 Tri County. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri County Financial has no effect on the direction of United Bancorporation i.e., United Bancorporation and Tri County go up and down completely randomly.

Pair Corralation between United Bancorporation and Tri County

Given the investment horizon of 90 days United Bancorporation of is expected to generate 1.26 times more return on investment than Tri County. However, United Bancorporation is 1.26 times more volatile than Tri County Financial Group. It trades about 0.18 of its potential returns per unit of risk. Tri County Financial Group is currently generating about 0.09 per unit of risk. If you would invest  5,060  in United Bancorporation of on September 15, 2024 and sell it today you would earn a total of  735.00  from holding United Bancorporation of or generate 14.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

United Bancorp. of  vs.  Tri County Financial Group

United Bancorporation

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Bancorporation of are ranked lower than 13 (%) 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.

Tri County Financial

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tri County Financial Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Tri County is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with United Bancorporation and Tri County

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

The idea behind United Bancorporation of and Tri County Financial Group 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.