Correlation Between COMMERCIAL BANK and Union Bank
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By analyzing existing cross correlation between COMMERCIAL BANK OF and Union Bank, you can compare the effects of market volatilities on COMMERCIAL BANK 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 COMMERCIAL BANK with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL BANK and Union Bank.
Diversification Opportunities for COMMERCIAL BANK and Union Bank
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COMMERCIAL and Union is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL BANK OF and Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and COMMERCIAL BANK 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 COMMERCIAL BANK OF 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 COMMERCIAL BANK i.e., COMMERCIAL BANK and Union Bank go up and down completely randomly.
Pair Corralation between COMMERCIAL BANK and Union Bank
Assuming the 90 days trading horizon COMMERCIAL BANK OF is expected to generate 0.96 times more return on investment than Union Bank. However, COMMERCIAL BANK OF is 1.05 times less risky than Union Bank. It trades about 0.1 of its potential returns per unit of risk. Union Bank is currently generating about 0.05 per unit of risk. If you would invest 4,150 in COMMERCIAL BANK OF on September 19, 2024 and sell it today you would earn a total of 6,250 from holding COMMERCIAL BANK OF or generate 150.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
COMMERCIAL BANK OF vs. Union Bank
Performance |
| Timeline |
| COMMERCIAL BANK |
| Union Bank |
COMMERCIAL BANK and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL BANK and Union Bank
The main advantage of trading using opposite COMMERCIAL BANK and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL BANK 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.| COMMERCIAL BANK vs. Lanka Credit and | COMMERCIAL BANK vs. VIDULLANKA PLC | COMMERCIAL BANK vs. Carson Cumberbatch PLC | COMMERCIAL BANK vs. Peoples Insurance PLC |
| Union Bank vs. Lanka Credit and | Union Bank vs. VIDULLANKA PLC | Union Bank vs. Carson Cumberbatch PLC | Union Bank vs. Peoples Insurance PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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