Correlation Between Univest Pennsylvania and Capital One
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and Capital One 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 Univest Pennsylvania and Capital One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Capital One Financial, you can compare the effects of market volatilities on Univest Pennsylvania and Capital One 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 Univest Pennsylvania with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Capital One.
Diversification Opportunities for Univest Pennsylvania and Capital One
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Univest and Capital is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and Univest Pennsylvania 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 Univest Pennsylvania are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Capital One go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Capital One
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 2.4 times more return on investment than Capital One. However, Univest Pennsylvania is 2.4 times more volatile than Capital One Financial. It trades about 0.1 of its potential returns per unit of risk. Capital One Financial is currently generating about -0.11 per unit of risk. If you would invest 2,774 in Univest Pennsylvania on September 14, 2024 and sell it today you would earn a total of 390.00 from holding Univest Pennsylvania or generate 14.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Univest Pennsylvania vs. Capital One Financial
Performance |
Timeline |
Univest Pennsylvania |
Capital One Financial |
Univest Pennsylvania and Capital One Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Univest Pennsylvania and Capital One
The main advantage of trading using opposite Univest Pennsylvania and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, Capital One 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 Capital One will offset losses from the drop in Capital One's long position.Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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