Correlation Between Pan Asia and Union Bank
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By analyzing existing cross correlation between Pan Asia Banking and Union Bank, you can compare the effects of market volatilities on Pan Asia 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 Pan Asia with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Asia and Union Bank.
Diversification Opportunities for Pan Asia and Union Bank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pan and Union is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pan Asia Banking and Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Pan Asia 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 Pan Asia Banking 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 Pan Asia i.e., Pan Asia and Union Bank go up and down completely randomly.
Pair Corralation between Pan Asia and Union Bank
Assuming the 90 days trading horizon Pan Asia Banking is expected to under-perform the Union Bank. But the stock apears to be less risky and, when comparing its historical volatility, Pan Asia Banking is 1.03 times less risky than Union Bank. The stock trades about -0.19 of its potential returns per unit of risk. The Union Bank is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,150 in Union Bank on November 29, 2024 and sell it today you would lose (90.00) from holding Union Bank or give up 7.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan Asia Banking vs. Union Bank
Performance |
| Timeline |
| Pan Asia Banking |
| Union Bank |
Pan Asia and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Asia and Union Bank
The main advantage of trading using opposite Pan Asia and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Asia 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.| Pan Asia vs. BROWNS INVESTMENTS PLC | Pan Asia vs. Nations Trust Bank | Pan Asia vs. Amaya Leisure PLC | Pan Asia vs. PEOPLES LEASING FINANCE |
| Union Bank vs. Kandy Hotels | Union Bank vs. Sampath Bank PLC | Union Bank vs. Hotel Sigiriya PLC | Union Bank vs. Pan Asia Banking |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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