Correlation Between Ollies Bargain and BankUnited

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Can any of the company-specific risk be diversified away by investing in both Ollies Bargain and BankUnited 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 Ollies Bargain and BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ollies Bargain CS and BankUnited, you can compare the effects of market volatilities on Ollies Bargain and BankUnited 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 Ollies Bargain with a short position of BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and BankUnited.

Diversification Opportunities for Ollies Bargain and BankUnited

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ollies and BankUnited is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain CS and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited and Ollies Bargain 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 Ollies Bargain CS are associated (or correlated) with BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Ollies Bargain i.e., Ollies Bargain and BankUnited go up and down completely randomly.

Pair Corralation between Ollies Bargain and BankUnited

Given the investment horizon of 90 days Ollies Bargain CS is expected to under-perform the BankUnited. In addition to that, Ollies Bargain is 1.26 times more volatile than BankUnited. It trades about -0.01 of its total potential returns per unit of risk. BankUnited is currently generating about 0.06 per unit of volatility. If you would invest  2,190  in BankUnited on May 15, 2022 and sell it today you would earn a total of  1,892  from holding BankUnited or generate 86.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ollies Bargain CS  vs.  BankUnited

 Performance (%) 
       Timeline  
Ollies Bargain CS 
Ollies Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ollies Bargain CS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain essential indicators, Ollies Bargain reported solid returns over the last few months and may actually be approaching a breakup point.

Ollies Price Channel

BankUnited 
BankUnited Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in BankUnited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking signals, BankUnited may actually be approaching a critical reversion point that can send shares even higher in September 2022.

BankUnited Price Channel

Ollies Bargain and BankUnited Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ollies Bargain and BankUnited

The main advantage of trading using opposite Ollies Bargain and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.
The idea behind Ollies Bargain CS and BankUnited 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.

BankUnited

Pair trading matchups for BankUnited

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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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