Correlation Between Max Financial and City Union
Can any of the company-specific risk be diversified away by investing in both Max Financial and City Union 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 Max Financial and City Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Max Financial Services and City Union Bank, you can compare the effects of market volatilities on Max Financial and City Union 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 Max Financial with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Financial and City Union.
Diversification Opportunities for Max Financial and City Union
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Max and City is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Max Financial Services and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank and Max Financial 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 Max Financial Services are associated (or correlated) with City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of Max Financial i.e., Max Financial and City Union go up and down completely randomly.
Pair Corralation between Max Financial and City Union
Assuming the 90 days trading horizon Max Financial Services is expected to under-perform the City Union. In addition to that, Max Financial is 1.33 times more volatile than City Union Bank. It trades about -0.34 of its total potential returns per unit of risk. City Union Bank is currently generating about 0.09 per unit of volatility. If you would invest 17,574 in City Union Bank on September 1, 2024 and sell it today you would earn a total of 379.00 from holding City Union Bank or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Max Financial Services vs. City Union Bank
Performance |
| Timeline |
| Max Financial Services |
| City Union Bank |
Max Financial and City Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Max Financial and City Union
The main advantage of trading using opposite Max Financial and City Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Max Financial position performs unexpectedly, City Union 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 City Union will offset losses from the drop in City Union's long position.| Max Financial vs. Sukhjit Starch Chemicals | Max Financial vs. Mangalore Chemicals Fertilizers | Max Financial vs. Steel Authority of | Max Financial vs. Neogen Chemicals Limited |
| City Union vs. Reliance Industrial Infrastructure | City Union vs. NRB Industrial Bearings | City Union vs. Indian Metals Ferro | City Union vs. Shivalik Bimetal Controls |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |