Correlation Between Westbury Bancorp and Uwharrie Capital

Can any of the company-specific risk be diversified away by investing in both Westbury Bancorp and Uwharrie Capital 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 Westbury Bancorp and Uwharrie Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Westbury Bancorp and Uwharrie Capital Corp, you can compare the effects of market volatilities on Westbury Bancorp and Uwharrie Capital 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 Westbury Bancorp with a short position of Uwharrie Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westbury Bancorp and Uwharrie Capital.

Diversification Opportunities for Westbury Bancorp and Uwharrie Capital

-0.42

Correlation Coefficient

Westbury Bancorp  Uwharrie Capital

Very good diversification

The 3 months correlation between Westbury and Uwharrie is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Westbury Bancorp and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp and Westbury Bancorp 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 Westbury Bancorp are associated (or correlated) with Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of Westbury Bancorp i.e., Westbury Bancorp and Uwharrie Capital go up and down completely randomly.

Pair Corralation between Westbury Bancorp and Uwharrie Capital

If you would invest  800.00  in Uwharrie Capital Corp on October 8, 2024 and sell it today you would earn a total of  50.00  from holding Uwharrie Capital Corp or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

Westbury Bancorp  vs.  Uwharrie Capital Corp

Westbury Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westbury Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental drivers, Westbury Bancorp is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Uwharrie Capital Corp

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Westbury Bancorp and Uwharrie Capital

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

The idea behind Westbury Bancorp and Uwharrie Capital Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.