Correlation Between BDO Unibank and Hang Seng
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and Hang Seng 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 BDO Unibank and Hang Seng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank ADR and Hang Seng Bank, you can compare the effects of market volatilities on BDO Unibank and Hang Seng 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 BDO Unibank with a short position of Hang Seng. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Hang Seng.
Diversification Opportunities for BDO Unibank and Hang Seng
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BDO and Hang is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank ADR and Hang Seng Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Seng Bank and BDO Unibank 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 BDO Unibank ADR are associated (or correlated) with Hang Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Seng Bank has no effect on the direction of BDO Unibank i.e., BDO Unibank and Hang Seng go up and down completely randomly.
Pair Corralation between BDO Unibank and Hang Seng
Assuming the 90 days horizon BDO Unibank ADR is expected to under-perform the Hang Seng. In addition to that, BDO Unibank is 1.41 times more volatile than Hang Seng Bank. It trades about -0.05 of its total potential returns per unit of risk. Hang Seng Bank is currently generating about 0.16 per unit of volatility. If you would invest 1,200 in Hang Seng Bank on November 4, 2024 and sell it today you would earn a total of 55.00 from holding Hang Seng Bank or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank ADR vs. Hang Seng Bank
Performance |
| Timeline |
| BDO Unibank ADR |
| Hang Seng Bank |
BDO Unibank and Hang Seng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and Hang Seng
The main advantage of trading using opposite BDO Unibank and Hang Seng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, Hang Seng 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 Hang Seng will offset losses from the drop in Hang Seng's long position.| BDO Unibank vs. Swedbank AB | BDO Unibank vs. United Overseas Bank | BDO Unibank vs. KBC Groep NV | BDO Unibank vs. Jyske Bank AS |
| Hang Seng vs. Caixabank SA ADR | Hang Seng vs. Commercial International Bank | Hang Seng vs. PT Bank Rakyat | Hang Seng vs. Riverview Bancorp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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