Correlation Between Asia United and Union Bank
Can any of the company-specific risk be diversified away by investing in both Asia United and Union 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 Union 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 Union Bank of, you can compare the effects of market volatilities on Asia United and Union 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 Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Union Bank.
Diversification Opportunities for Asia United and Union Bank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Union is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank 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 Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of Asia United i.e., Asia United and Union Bank go up and down completely randomly.
Pair Corralation between Asia United and Union Bank
Assuming the 90 days trading horizon Asia United Bank is expected to generate 1.06 times more return on investment than Union Bank. However, Asia United is 1.06 times more volatile than Union Bank of. It trades about 0.43 of its potential returns per unit of risk. Union Bank of is currently generating about 0.01 per unit of risk. If you would invest 6,275 in Asia United Bank on October 20, 2024 and sell it today you would earn a total of 925.00 from holding Asia United Bank or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia United Bank vs. Union Bank of
Performance |
| Timeline |
| Asia United Bank |
| Union Bank |
Asia United and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Union Bank
The main advantage of trading using opposite Asia United and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Union 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 Union Bank will offset losses from the drop in Union Bank's long position.| Asia United vs. National Reinsurance | Asia United vs. Converge Information Communications | Asia United vs. Security Bank Corp | Asia United vs. Suntrust Home Developers |
| Union Bank vs. Security Bank Corp | Union Bank vs. Alliance Select Foods | Union Bank vs. Prime Media Holdings | Union Bank vs. Robinsons Retail Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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