Correlation Between Western Union and Juniata Valley
Can any of the company-specific risk be diversified away by investing in both Western Union and Juniata Valley 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 Western Union and Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Juniata Valley Financial, you can compare the effects of market volatilities on Western Union and Juniata Valley 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 Western Union with a short position of Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Juniata Valley.
Diversification Opportunities for Western Union and Juniata Valley
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Juniata is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial and Western Union 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 Western Union Co are associated (or correlated) with Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of Western Union i.e., Western Union and Juniata Valley go up and down completely randomly.
Pair Corralation between Western Union and Juniata Valley
Allowing for the 90-day total investment horizon Western Union is expected to generate 1.61 times less return on investment than Juniata Valley. But when comparing it to its historical volatility, Western Union Co is 1.46 times less risky than Juniata Valley. It trades about 0.02 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,288 in Juniata Valley Financial on December 4, 2024 and sell it today you would earn a total of 22.00 from holding Juniata Valley Financial or generate 1.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Western Union Co vs. Juniata Valley Financial
Performance |
Timeline |
Western Union |
Juniata Valley Financial |
Western Union and Juniata Valley Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Union and Juniata Valley
The main advantage of trading using opposite Western Union and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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