Correlation Between Asia United and Security Bank
Can any of the company-specific risk be diversified away by investing in both Asia United and Security Bank 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 Asia United and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and Security Bank Corp, you can compare the effects of market volatilities on Asia United and Security Bank 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 Asia United with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Security Bank.
Diversification Opportunities for Asia United and Security Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Security is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and Asia United 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 Asia United Bank are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Asia United i.e., Asia United and Security Bank go up and down completely randomly.
Pair Corralation between Asia United and Security Bank
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.66 times more return on investment than Security Bank. However, Asia United Bank is 1.51 times less risky than Security Bank. It trades about 0.35 of its potential returns per unit of risk. Security Bank Corp is currently generating about -0.27 per unit of risk. If you would invest 6,300 in Asia United Bank on November 2, 2024 and sell it today you would earn a total of 795.00 from holding Asia United Bank or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia United Bank vs. Security Bank Corp
Performance |
| Timeline |
| Asia United Bank |
| Security Bank Corp |
Asia United and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Security Bank
The main advantage of trading using opposite Asia United and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| Asia United vs. National Reinsurance | Asia United vs. Integrated Micro Electronics | Asia United vs. Converge Information Communications | Asia United vs. Philippine Business Bank |
| Security Bank vs. BDO Unibank | Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Union Bank of | Security Bank vs. Philippine National Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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