Correlation Between Union Bank and Peoples Insurance
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By analyzing existing cross correlation between Union Bank and Peoples Insurance PLC, you can compare the effects of market volatilities on Union Bank and Peoples 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 Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Peoples Insurance.
Diversification Opportunities for Union Bank and Peoples Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Union and Peoples is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank and Peoples Insurance PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance PLC 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance PLC has no effect on the direction of Union Bank i.e., Union Bank and Peoples Insurance go up and down completely randomly.
Pair Corralation between Union Bank and Peoples Insurance
Assuming the 90 days trading horizon Union Bank is expected to generate 1.13 times more return on investment than Peoples Insurance. However, Union Bank is 1.13 times more volatile than Peoples Insurance PLC. It trades about 0.03 of its potential returns per unit of risk. Peoples Insurance PLC is currently generating about 0.03 per unit of risk. If you would invest 790.00 in Union Bank on September 2, 2024 and sell it today you would earn a total of 180.00 from holding Union Bank or generate 22.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Union Bank vs. Peoples Insurance PLC
Performance |
| Timeline |
| Union Bank |
| Peoples Insurance PLC |
Union Bank and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Peoples Insurance
The main advantage of trading using opposite Union Bank and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Peoples 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| Union Bank vs. Ceylon Guardian Investment | Union Bank vs. HATTON NATIONAL BANK | Union Bank vs. Convenience Foods PLC | Union Bank vs. National Development Bank |
| Peoples Insurance vs. National Development Bank | Peoples Insurance vs. Sampath Bank PLC | Peoples Insurance vs. Union Bank | Peoples Insurance vs. Convenience Foods PLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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