Correlation Between Union Bank and Asia United
Can any of the company-specific risk be diversified away by investing in both Union Bank and Asia United 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 Union Bank and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Bank of and Asia United Bank, you can compare the effects of market volatilities on Union Bank and Asia United 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 Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Asia United.
Diversification Opportunities for Union Bank and Asia United
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and Asia is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank 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 of are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Union Bank i.e., Union Bank and Asia United go up and down completely randomly.
Pair Corralation between Union Bank and Asia United
Assuming the 90 days trading horizon Union Bank of is expected to under-perform the Asia United. In addition to that, Union Bank is 1.11 times more volatile than Asia United Bank. It trades about -0.04 of its total potential returns per unit of risk. Asia United Bank is currently generating about 0.33 per unit of volatility. If you would invest 4,950 in Asia United Bank on August 28, 2024 and sell it today you would earn a total of 1,350 from holding Asia United Bank or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bank of vs. Asia United Bank
Performance |
| Timeline |
| Union Bank |
| Asia United Bank |
Union Bank and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Asia United
The main advantage of trading using opposite Union Bank and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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