Correlation Between Union Bank and Century Pacific
Can any of the company-specific risk be diversified away by investing in both Union Bank and Century Pacific 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 Century Pacific 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 Century Pacific Food, you can compare the effects of market volatilities on Union Bank and Century Pacific 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 Century Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Century Pacific.
Diversification Opportunities for Union Bank and Century Pacific
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and Century is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Century Pacific Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Pacific Food 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 Century Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Pacific Food has no effect on the direction of Union Bank i.e., Union Bank and Century Pacific go up and down completely randomly.
Pair Corralation between Union Bank and Century Pacific
Assuming the 90 days trading horizon Union Bank of is expected to under-perform the Century Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Union Bank of is 1.04 times less risky than Century Pacific. The stock trades about -0.15 of its potential returns per unit of risk. The Century Pacific Food is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,080 in Century Pacific Food on September 13, 2024 and sell it today you would earn a total of 205.00 from holding Century Pacific Food or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bank of vs. Century Pacific Food
Performance |
| Timeline |
| Union Bank |
| Century Pacific Food |
Union Bank and Century Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Century Pacific
The main advantage of trading using opposite Union Bank and Century Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Century Pacific 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 Century Pacific will offset losses from the drop in Century Pacific's long position.| Union Bank vs. Philippine Business Bank | Union Bank vs. Security Bank Corp | Union Bank vs. Pacificonline Systems | Union Bank vs. COL Financial Group |
| Century Pacific vs. Megawide Construction Corp | Century Pacific vs. Apex Mining Co | Century Pacific vs. Union Bank of | Century Pacific vs. East West Banking |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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