Correlation Between United Community and Univest Pennsylvania

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

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

Diversification Opportunities for United Community and Univest Pennsylvania

-0.23

Correlation Coefficient

United Community  Univest Pennsylvania

Very good diversification

The 3 months correlation between United and Univest is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding United Community Banks and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania and United Community 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 Community Banks are associated (or correlated) with Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of United Community i.e., United Community and Univest Pennsylvania go up and down completely randomly.

Pair Corralation between United Community and Univest Pennsylvania

If you would invest  2,987  in Univest Pennsylvania on October 25, 2024 and sell it today you would earn a total of  8.00  from holding Univest Pennsylvania or generate 0.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

United Community Banks  vs.  Univest Pennsylvania

United Community Banks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Community Banks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, United Community is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Univest Pennsylvania

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Univest Pennsylvania are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Univest Pennsylvania may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with United Community and Univest Pennsylvania

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

The idea behind United Community Banks and Univest Pennsylvania 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.