Correlation Between STI Education and Union Bank
Can any of the company-specific risk be diversified away by investing in both STI Education 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 STI Education and Union Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and Union Bank of, you can compare the effects of market volatilities on STI Education 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 STI Education with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Union Bank.
Diversification Opportunities for STI Education and Union Bank
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STI and Union is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and STI Education 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 STI Education Systems 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 STI Education i.e., STI Education and Union Bank go up and down completely randomly.
Pair Corralation between STI Education and Union Bank
Assuming the 90 days trading horizon STI Education Systems is expected to generate 0.91 times more return on investment than Union Bank. However, STI Education Systems is 1.1 times less risky than Union Bank. It trades about 0.03 of its potential returns per unit of risk. Union Bank of is currently generating about -0.16 per unit of risk. If you would invest 126.00 in STI Education Systems on August 29, 2024 and sell it today you would earn a total of 1.00 from holding STI Education Systems or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STI Education Systems vs. Union Bank of
Performance |
| Timeline |
| STI Education Systems |
| Union Bank |
STI Education and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and Union Bank
The main advantage of trading using opposite STI Education and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education 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.| STI Education vs. Figaro Coffee Group | STI Education vs. Rizal Commercial Banking | STI Education vs. Union Bank of | STI Education vs. Semirara Mining Corp |
| Union Bank vs. Apex Mining Co | Union Bank vs. Suntrust Home Developers | Union Bank vs. SM Investments Corp | Union Bank vs. Philex Mining Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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