Correlation Between Virginia National and United Bancorporation

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

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

Diversification Opportunities for Virginia National and United Bancorporation

0.46

Correlation Coefficient

Virginia National  United Bancorporation

Very weak diversification

The 3 months correlation between Virginia and United is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Virginia National Bankshares and United Bancorp. of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancorporation and Virginia National 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 Virginia National Bankshares 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 Virginia National i.e., Virginia National and United Bancorporation go up and down completely randomly.

Pair Corralation between Virginia National and United Bancorporation

Given the investment horizon of 90 days Virginia National Bankshares is expected to under-perform the United Bancorporation. In addition to that, Virginia National is 2.54 times more volatile than United Bancorporation of. It trades about -0.25 of its total potential returns per unit of risk. United Bancorporation of is currently generating about -0.22 per unit of volatility. If you would invest  5,900  in United Bancorporation of on September 24, 2024 and sell it today you would lose (200.00) from holding United Bancorporation of or give up 3.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Virginia National Bankshares  vs.  United Bancorp. of

Virginia National

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virginia National Bankshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Virginia National is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 abnormal basic indicators, United Bancorporation sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virginia National and United Bancorporation

The main advantage of trading using opposite Virginia National and United Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia National 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 Virginia National Bankshares 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.