Correlation Between Juniata Valley and Western Union

Can any of the company-specific risk be diversified away by investing in both Juniata Valley and Western Union 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 Juniata Valley and Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Juniata Valley Financial and Western Union Co, you can compare the effects of market volatilities on Juniata Valley and Western Union 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 Juniata Valley with a short position of Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Juniata Valley and Western Union.

Diversification Opportunities for Juniata Valley and Western Union

0.22

Correlation Coefficient

Juniata Valley  Western Union

Modest diversification

The 3 months correlation between Juniata and Western is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Juniata Valley Financial and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union and Juniata Valley 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 Juniata Valley Financial are associated (or correlated) with Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Juniata Valley i.e., Juniata Valley and Western Union go up and down completely randomly.

Pair Corralation between Juniata Valley and Western Union

Given the investment horizon of 90 days Juniata Valley Financial is expected to under-perform the Western Union. In addition to that, Juniata Valley is 1.43 times more volatile than Western Union Co. It trades about -0.01 of its total potential returns per unit of risk. Western Union Co is currently generating about 0.01 per unit of volatility. If you would invest  1,045  in Western Union Co on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Western Union Co or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Juniata Valley Financial  vs.  Western Union Co

Juniata Valley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniata Valley Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Juniata Valley is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Western Union

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Western Union is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Juniata Valley and Western Union

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

The idea behind Juniata Valley Financial and Western Union Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.