Correlation Between Univest Pennsylvania and 26442RAB7

Can any of the company-specific risk be diversified away by investing in both Univest Pennsylvania and 26442RAB7 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 26442RAB7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Univest Pennsylvania and DUKE ENERGY PROGRESS, you can compare the effects of market volatilities on Univest Pennsylvania and 26442RAB7 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 26442RAB7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Univest Pennsylvania and 26442RAB7.

Diversification Opportunities for Univest Pennsylvania and 26442RAB7

-0.68

Correlation Coefficient

Univest Pennsylvania  26442RAB7

Excellent diversification

The 3 months correlation between Univest and 26442RAB7 is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and DUKE ENERGY PROGRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY PROGRESS 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 26442RAB7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY PROGRESS has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and 26442RAB7 go up and down completely randomly.

Pair Corralation between Univest Pennsylvania and 26442RAB7

Given the investment horizon of 90 days Univest Pennsylvania is expected to under-perform the 26442RAB7. But the stock apears to be less risky and, when comparing its historical volatility, Univest Pennsylvania is 1.37 times less risky than 26442RAB7. The stock trades about -0.3 of its potential returns per unit of risk. The DUKE ENERGY PROGRESS is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  8,826  in DUKE ENERGY PROGRESS on October 10, 2024 and sell it today you would lose (209.00) from holding DUKE ENERGY PROGRESS or give up 2.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	71.43%
Values	Daily Returns

Univest Pennsylvania  vs.  DUKE ENERGY PROGRESS

Univest Pennsylvania

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Univest Pennsylvania are ranked lower than 4 (%) 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.

DUKE ENERGY PROGRESS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY PROGRESS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for DUKE ENERGY PROGRESS investors.

Pair Trading with Univest Pennsylvania and 26442RAB7

The main advantage of trading using opposite Univest Pennsylvania and 26442RAB7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania position performs unexpectedly, 26442RAB7 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 26442RAB7 will offset losses from the drop in 26442RAB7's long position.

The idea behind Univest Pennsylvania and DUKE ENERGY PROGRESS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.