Correlation Between Alliance Select and Union Bank
Can any of the company-specific risk be diversified away by investing in both Alliance Select 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 Alliance Select and Union Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Select Foods and Union Bank of, you can compare the effects of market volatilities on Alliance Select 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 Alliance Select with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Select and Union Bank.
Diversification Opportunities for Alliance Select and Union Bank
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and Union is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Select Foods and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Alliance Select 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 Alliance Select Foods 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 Alliance Select i.e., Alliance Select and Union Bank go up and down completely randomly.
Pair Corralation between Alliance Select and Union Bank
Assuming the 90 days trading horizon Alliance Select Foods is expected to generate 2.11 times more return on investment than Union Bank. However, Alliance Select is 2.11 times more volatile than Union Bank of. It trades about -0.01 of its potential returns per unit of risk. Union Bank of is currently generating about -0.04 per unit of risk. If you would invest 52.00 in Alliance Select Foods on August 24, 2024 and sell it today you would lose (14.00) from holding Alliance Select Foods or give up 26.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 58.63% |
| Values | Daily Returns |
Alliance Select Foods vs. Union Bank of
Performance |
| Timeline |
| Alliance Select Foods |
| Union Bank |
Alliance Select and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Select and Union Bank
The main advantage of trading using opposite Alliance Select and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Select 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.| Alliance Select vs. Metro Retail Stores | Alliance Select vs. Century Pacific Food | Alliance Select vs. Lepanto Consolidated Mining | Alliance Select vs. Crown Asia Chemicals |
| Union Bank vs. Century Pacific Food | Union Bank vs. SM Investments Corp | Union Bank vs. Lepanto Consolidated Mining | Union Bank vs. Alliance Select Foods |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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