Correlation Between Union Bank and ENEX Energy
Can any of the company-specific risk be diversified away by investing in both Union Bank and ENEX Energy 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 ENEX Energy 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 ENEX Energy Corp, you can compare the effects of market volatilities on Union Bank and ENEX Energy 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 ENEX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and ENEX Energy.
Diversification Opportunities for Union Bank and ENEX Energy
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and ENEX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and ENEX Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEX Energy Corp 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 ENEX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEX Energy Corp has no effect on the direction of Union Bank i.e., Union Bank and ENEX Energy go up and down completely randomly.
Pair Corralation between Union Bank and ENEX Energy
Assuming the 90 days trading horizon Union Bank is expected to generate 11.85 times less return on investment than ENEX Energy. But when comparing it to its historical volatility, Union Bank of is 3.02 times less risky than ENEX Energy. It trades about 0.03 of its potential returns per unit of risk. ENEX Energy Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 473.00 in ENEX Energy Corp on October 22, 2024 and sell it today you would earn a total of 45.00 from holding ENEX Energy Corp or generate 9.51% 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. ENEX Energy Corp
Performance |
| Timeline |
| Union Bank |
| ENEX Energy Corp |
Union Bank and ENEX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and ENEX Energy
The main advantage of trading using opposite Union Bank and ENEX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, ENEX Energy 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 ENEX Energy will offset losses from the drop in ENEX Energy's long position.| Union Bank vs. BDO Unibank | Union Bank vs. Metropolitan Bank Trust | Union Bank vs. Security Bank Corp | Union Bank vs. Philippine National Bank |
| ENEX Energy vs. Oriental Petroleum and | ENEX Energy vs. Basic Energy Corp | ENEX Energy vs. Allhome Corp | ENEX Energy vs. Jollibee Foods 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |