Correlation Between UNITED BANK and DEAP CAPITAL

Can any of the company-specific risk be diversified away by investing in both UNITED BANK and DEAP 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 UNITED BANK and DEAP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNITED BANK FOR and DEAP CAPITAL MANAGEMENT, you can compare the effects of market volatilities on UNITED BANK and DEAP 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 UNITED BANK with a short position of DEAP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED BANK and DEAP CAPITAL.

Diversification Opportunities for UNITED BANK and DEAP CAPITAL

0.29

Correlation Coefficient

UNITED BANK  DEAP CAPITAL

Modest diversification

The 3 months correlation between UNITED and DEAP is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding UNITED BANK FOR and DEAP CAPITAL MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEAP CAPITAL MANAGEMENT and UNITED 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 UNITED BANK FOR are associated (or correlated) with DEAP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEAP CAPITAL MANAGEMENT has no effect on the direction of UNITED BANK i.e., UNITED BANK and DEAP CAPITAL go up and down completely randomly.

Pair Corralation between UNITED BANK and DEAP CAPITAL

Assuming the 90 days trading horizon UNITED BANK is expected to generate 1.62 times less return on investment than DEAP CAPITAL. But when comparing it to its historical volatility, UNITED BANK FOR is 1.59 times less risky than DEAP CAPITAL. It trades about 0.06 of its potential returns per unit of risk. DEAP CAPITAL MANAGEMENT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  67.00  in DEAP CAPITAL MANAGEMENT on September 4, 2024 and sell it today you would earn a total of  41.00  from holding DEAP CAPITAL MANAGEMENT or generate 61.19% return on investment over 90 days.

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

UNITED BANK FOR  vs.  DEAP CAPITAL MANAGEMENT

UNITED BANK FOR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED BANK FOR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, UNITED BANK unveiled solid returns over the last few months and may actually be approaching a breakup point.

DEAP CAPITAL MANAGEMENT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DEAP CAPITAL MANAGEMENT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, DEAP CAPITAL is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UNITED BANK and DEAP CAPITAL

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

The idea behind UNITED BANK FOR and DEAP CAPITAL MANAGEMENT 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.