Correlation Between Convenience Foods and Union Bank
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By analyzing existing cross correlation between Convenience Foods PLC and Union Bank, you can compare the effects of market volatilities on Convenience Foods 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 Convenience Foods with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Convenience Foods and Union Bank.
Diversification Opportunities for Convenience Foods and Union Bank
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Convenience and Union is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Convenience Foods PLC and Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Convenience Foods 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 Convenience Foods PLC 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 Convenience Foods i.e., Convenience Foods and Union Bank go up and down completely randomly.
Pair Corralation between Convenience Foods and Union Bank
Assuming the 90 days trading horizon Convenience Foods PLC is expected to generate 2.05 times more return on investment than Union Bank. However, Convenience Foods is 2.05 times more volatile than Union Bank. It trades about 0.32 of its potential returns per unit of risk. Union Bank is currently generating about -0.22 per unit of risk. If you would invest 76,775 in Convenience Foods PLC on August 28, 2024 and sell it today you would earn a total of 9,250 from holding Convenience Foods PLC or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Convenience Foods PLC vs. Union Bank
Performance |
| Timeline |
| Convenience Foods PLC |
| Union Bank |
Convenience Foods and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Convenience Foods and Union Bank
The main advantage of trading using opposite Convenience Foods and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Convenience Foods 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.| Convenience Foods vs. DFCC Bank PLC | Convenience Foods vs. PEOPLES LEASING FINANCE | Convenience Foods vs. Serendib Hotels PLC | Convenience Foods vs. Commercial Credit and |
| Union Bank vs. Amaya Leisure PLC | Union Bank vs. Eden Hotel Lanka | Union Bank vs. Lanka Realty Investments | Union Bank vs. Lanka Milk 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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