Correlation Between Utah Medical and United Bancshares

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

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

Diversification Opportunities for Utah Medical and United Bancshares

0.0

Correlation Coefficient

Utah Medical  United Bancshares

Pay attention - limited upside

The 3 months correlation between Utah and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Utah Medical Products and United Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bancshares and Utah Medical 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 Utah Medical Products are associated (or correlated) with United Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bancshares has no effect on the direction of Utah Medical i.e., Utah Medical and United Bancshares go up and down completely randomly.

Pair Corralation between Utah Medical and United Bancshares

If you would invest (100.00) in United Bancshares on December 28, 2024 and sell it today you would earn a total of  100.00  from holding United Bancshares or generate -100.0% return on investment over 90 days.

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

Utah Medical Products  vs.  United Bancshares

Utah Medical Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Utah Medical Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

United Bancshares

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Utah Medical and United Bancshares

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

The idea behind Utah Medical Products and United Bancshares 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.