Correlation Between Union Bank and Janashakthi Insurance
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By analyzing existing cross correlation between Union Bank and Janashakthi Insurance, you can compare the effects of market volatilities on Union Bank and Janashakthi Insurance 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 Union Bank with a short position of Janashakthi Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Janashakthi Insurance.
Diversification Opportunities for Union Bank and Janashakthi Insurance
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and Janashakthi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank and Janashakthi Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janashakthi Insurance and Union 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 Union Bank are associated (or correlated) with Janashakthi Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janashakthi Insurance has no effect on the direction of Union Bank i.e., Union Bank and Janashakthi Insurance go up and down completely randomly.
Pair Corralation between Union Bank and Janashakthi Insurance
Assuming the 90 days trading horizon Union Bank is expected to generate 10.25 times less return on investment than Janashakthi Insurance. But when comparing it to its historical volatility, Union Bank is 1.47 times less risky than Janashakthi Insurance. It trades about 0.02 of its potential returns per unit of risk. Janashakthi Insurance is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,900 in Janashakthi Insurance on August 31, 2024 and sell it today you would earn a total of 610.00 from holding Janashakthi Insurance or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bank vs. Janashakthi Insurance
Performance |
| Timeline |
| Union Bank |
| Janashakthi Insurance |
Union Bank and Janashakthi Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Janashakthi Insurance
The main advantage of trading using opposite Union Bank and Janashakthi Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Janashakthi Insurance 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 Janashakthi Insurance will offset losses from the drop in Janashakthi Insurance's long position.| Union Bank vs. CEYLINCO INSURANCE PLC | Union Bank vs. Carson Cumberbatch PLC | Union Bank vs. Arpico Insurance | Union Bank vs. Pan Asia Banking |
| Janashakthi Insurance vs. HNB Finance | Janashakthi Insurance vs. Prime Lands Residencies | Janashakthi Insurance vs. Jat Holdings PLC | Janashakthi Insurance vs. E M L |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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