Correlation Between Union Bank and Filinvest Development
Can any of the company-specific risk be diversified away by investing in both Union Bank and Filinvest Development 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 Filinvest Development 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 Filinvest Development Coproration, you can compare the effects of market volatilities on Union Bank and Filinvest Development 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 Filinvest Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Filinvest Development.
Diversification Opportunities for Union Bank and Filinvest Development
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and Filinvest is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Filinvest Development Coprorat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest Development 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 Filinvest Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest Development has no effect on the direction of Union Bank i.e., Union Bank and Filinvest Development go up and down completely randomly.
Pair Corralation between Union Bank and Filinvest Development
Assuming the 90 days trading horizon Union Bank of is expected to generate 1.55 times more return on investment than Filinvest Development. However, Union Bank is 1.55 times more volatile than Filinvest Development Coproration. It trades about 0.04 of its potential returns per unit of risk. Filinvest Development Coproration is currently generating about 0.01 per unit of risk. If you would invest 3,370 in Union Bank of on August 30, 2024 and sell it today you would earn a total of 320.00 from holding Union Bank of or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.43% |
| Values | Daily Returns |
Union Bank of vs. Filinvest Development Coprorat
Performance |
| Timeline |
| Union Bank |
| Filinvest Development |
Union Bank and Filinvest Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Filinvest Development
The main advantage of trading using opposite Union Bank and Filinvest Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Filinvest Development 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 Filinvest Development will offset losses from the drop in Filinvest Development's long position.| Union Bank vs. BDO Unibank | Union Bank vs. Metropolitan Bank Trust | Union Bank vs. Philippine National Bank | Union Bank vs. Asia United Bank |
| Filinvest Development vs. Concepcion Industrial Corp | Filinvest Development vs. Atlas Consolidated Mining | Filinvest Development vs. SM Investments Corp | Filinvest Development vs. Union Bank of |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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