Correlation Between City Union and DCB Bank
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By analyzing existing cross correlation between City Union Bank and DCB Bank Limited, you can compare the effects of market volatilities on City Union and DCB 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 City Union with a short position of DCB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Union and DCB Bank.
Diversification Opportunities for City Union and DCB Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between City and DCB is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding City Union Bank and DCB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCB Bank Limited and City Union 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 City Union Bank are associated (or correlated) with DCB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCB Bank Limited has no effect on the direction of City Union i.e., City Union and DCB Bank go up and down completely randomly.
Pair Corralation between City Union and DCB Bank
Assuming the 90 days trading horizon City Union Bank is expected to generate 1.33 times more return on investment than DCB Bank. However, City Union is 1.33 times more volatile than DCB Bank Limited. It trades about 0.05 of its potential returns per unit of risk. DCB Bank Limited is currently generating about 0.01 per unit of risk. If you would invest 17,038 in City Union Bank on September 2, 2024 and sell it today you would earn a total of 915.00 from holding City Union Bank or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
City Union Bank vs. DCB Bank Limited
Performance |
| Timeline |
| City Union Bank |
| DCB Bank Limited |
City Union and DCB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Union and DCB Bank
The main advantage of trading using opposite City Union and DCB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Union position performs unexpectedly, DCB 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 DCB Bank will offset losses from the drop in DCB Bank's long position.| City Union vs. Reliance Industries Limited | City Union vs. State Bank of | City Union vs. Oil Natural Gas |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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