Correlation Between Univest Pennsylvania and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and Parke 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 Univest Pennsylvania and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Univest Pennsylvania and Parke Bancorp, you can compare the effects of market volatilities on Univest Pennsylvania and Parke 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 Univest Pennsylvania with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and Parke Bancorp.
Diversification Opportunities for Univest Pennsylvania and Parke Bancorp
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Univest and Parke is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp 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 Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Parke Bancorp go up and down completely randomly.
Pair Corralation between Univest Pennsylvania and Parke Bancorp
Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.1 times more return on investment than Parke Bancorp. However, Univest Pennsylvania is 1.1 times more volatile than Parke Bancorp. It trades about 0.07 of its potential returns per unit of risk. Parke Bancorp is currently generating about -0.04 per unit of risk. If you would invest 2,942 in Univest Pennsylvania on November 30, 2024 and sell it today you would earn a total of 114.00 from holding Univest Pennsylvania or generate 3.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Univest Pennsylvania vs. Parke Bancorp
Performance |
Timeline |
Univest Pennsylvania |
Parke Bancorp |
Univest Pennsylvania and Parke Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Univest Pennsylvania and Parke Bancorp
The main advantage of trading using opposite Univest Pennsylvania and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, Parke 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 Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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