Correlation Between UNITED BANK and INDUSTRIAL MEDICAL
Can any of the company-specific risk be diversified away by investing in both UNITED BANK and INDUSTRIAL MEDICAL 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 UNITED BANK and INDUSTRIAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED BANK FOR and INDUSTRIAL MEDICAL GASES, you can compare the effects of market volatilities on UNITED BANK and INDUSTRIAL MEDICAL 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 UNITED BANK with a short position of INDUSTRIAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED BANK and INDUSTRIAL MEDICAL.
Diversification Opportunities for UNITED BANK and INDUSTRIAL MEDICAL
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNITED and INDUSTRIAL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding UNITED BANK FOR and INDUSTRIAL MEDICAL GASES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MEDICAL GASES and UNITED BANK 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 UNITED BANK FOR are associated (or correlated) with INDUSTRIAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MEDICAL GASES has no effect on the direction of UNITED BANK i.e., UNITED BANK and INDUSTRIAL MEDICAL go up and down completely randomly.
Pair Corralation between UNITED BANK and INDUSTRIAL MEDICAL
Assuming the 90 days trading horizon UNITED BANK FOR is expected to under-perform the INDUSTRIAL MEDICAL. In addition to that, UNITED BANK is 47.24 times more volatile than INDUSTRIAL MEDICAL GASES. It trades about -0.1 of its total potential returns per unit of risk. INDUSTRIAL MEDICAL GASES is currently generating about 0.23 per unit of volatility. If you would invest 3,795 in INDUSTRIAL MEDICAL GASES on October 24, 2024 and sell it today you would earn a total of 5.00 from holding INDUSTRIAL MEDICAL GASES or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED BANK FOR vs. INDUSTRIAL MEDICAL GASES
Performance |
| Timeline |
| UNITED BANK FOR |
| INDUSTRIAL MEDICAL GASES |
UNITED BANK and INDUSTRIAL MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED BANK and INDUSTRIAL MEDICAL
The main advantage of trading using opposite UNITED BANK and INDUSTRIAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED BANK position performs unexpectedly, INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL will offset losses from the drop in INDUSTRIAL MEDICAL's long position.| UNITED BANK vs. CUSTODIAN INVESTMENT PLC | UNITED BANK vs. AFRICAN ALLIANCE INSURANCE | UNITED BANK vs. CHAMPION BREWERIES PLC | UNITED BANK vs. ZENITH BANK PLC |
| INDUSTRIAL MEDICAL vs. AIICO INSURANCE PLC | INDUSTRIAL MEDICAL vs. ASO SAVINGS AND | INDUSTRIAL MEDICAL vs. C I LEASING | INDUSTRIAL MEDICAL vs. INTERNATIONAL ENERGY INSURANCE |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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