Correlation Between National Bank and Uwharrie Capital

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

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

Diversification Opportunities for National Bank and Uwharrie Capital

-0.13

Correlation Coefficient

National Bank  Uwharrie Capital

Good diversification

The 3 months correlation between National and Uwharrie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding National Bank of and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp and National Bank 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 National Bank of are associated (or correlated) with Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of National Bank i.e., National Bank and Uwharrie Capital go up and down completely randomly.

Pair Corralation between National Bank and Uwharrie Capital

Assuming the 90 days horizon National Bank of is expected to generate 1.41 times more return on investment than Uwharrie Capital. However, National Bank is 1.41 times more volatile than Uwharrie Capital Corp. It trades about 0.17 of its potential returns per unit of risk. Uwharrie Capital Corp is currently generating about -0.05 per unit of risk. If you would invest  789.00  in National Bank of on October 23, 2024 and sell it today you would earn a total of  81.00  from holding National Bank of or generate 10.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

National Bank of  vs.  Uwharrie Capital Corp

National Bank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, National Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Uwharrie Capital Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Uwharrie Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with National Bank and Uwharrie Capital

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

The idea behind National Bank of and Uwharrie Capital Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.