Correlation Between Union Bank and East West
Can any of the company-specific risk be diversified away by investing in both Union Bank and East West 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 East West 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 East West Banking, you can compare the effects of market volatilities on Union Bank and East West 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 East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and East West.
Diversification Opportunities for Union Bank and East West
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and East is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and East West Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Banking 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Banking has no effect on the direction of Union Bank i.e., Union Bank and East West go up and down completely randomly.
Pair Corralation between Union Bank and East West
Assuming the 90 days trading horizon Union Bank is expected to generate 4.56 times less return on investment than East West. In addition to that, Union Bank is 2.73 times more volatile than East West Banking. It trades about 0.01 of its total potential returns per unit of risk. East West Banking is currently generating about 0.16 per unit of volatility. If you would invest 970.00 in East West Banking on October 20, 2024 and sell it today you would earn a total of 17.00 from holding East West Banking or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bank of vs. East West Banking
Performance |
| Timeline |
| Union Bank |
| East West Banking |
Union Bank and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and East West
The main advantage of trading using opposite Union Bank and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| Union Bank vs. Security Bank Corp | Union Bank vs. Alliance Select Foods | Union Bank vs. Prime Media Holdings | Union Bank vs. Robinsons Retail Holdings |
| East West vs. Figaro Coffee Group | East West vs. Asia United Bank | East West vs. COL Financial Group | East West vs. Philippine Business Bank |
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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