Correlation Between Union Bank and Alliance Select
Can any of the company-specific risk be diversified away by investing in both Union Bank and Alliance Select 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 Alliance Select 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 Alliance Select Foods, you can compare the effects of market volatilities on Union Bank and Alliance Select 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 Alliance Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Alliance Select.
Diversification Opportunities for Union Bank and Alliance Select
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and Alliance is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Alliance Select Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Select Foods 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 Alliance Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Select Foods has no effect on the direction of Union Bank i.e., Union Bank and Alliance Select go up and down completely randomly.
Pair Corralation between Union Bank and Alliance Select
Assuming the 90 days trading horizon Union Bank of is expected to generate 0.39 times more return on investment than Alliance Select. However, Union Bank of is 2.59 times less risky than Alliance Select. It trades about -0.14 of its potential returns per unit of risk. Alliance Select Foods is currently generating about -0.07 per unit of risk. If you would invest 3,805 in Union Bank of on September 1, 2024 and sell it today you would lose (125.00) from holding Union Bank of or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Union Bank of vs. Alliance Select Foods
Performance |
| Timeline |
| Union Bank |
| Alliance Select Foods |
Union Bank and Alliance Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and Alliance Select
The main advantage of trading using opposite Union Bank and Alliance Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, Alliance Select 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 Alliance Select will offset losses from the drop in Alliance Select's long position.| Union Bank vs. Integrated Micro Electronics | Union Bank vs. Robinsons Retail Holdings | Union Bank vs. SM Investments Corp | Union Bank vs. Manila 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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