Correlation Between United Bancorporation and Mission Bancorp

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

Diversification Opportunities for United Bancorporation and Mission Bancorp

0.17

Correlation Coefficient

United Bancorporation  Mission Bancorp

Average diversification

The 3 months correlation between United and Mission is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Bancorp. of and Mission Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Bancorp 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 Mission Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Bancorp has no effect on the direction of United Bancorporation i.e., United Bancorporation and Mission Bancorp go up and down completely randomly.

Pair Corralation between United Bancorporation and Mission Bancorp

If you would invest  5,151  in United Bancorporation of on September 2, 2024 and sell it today you would earn a total of  679.00  from holding United Bancorporation of or generate 13.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

United Bancorp. of  vs.  Mission Bancorp

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

Mission Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mission Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Mission Bancorp is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with United Bancorporation and Mission Bancorp

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

The idea behind United Bancorporation of and Mission Bancorp 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.