Correlation Between Union Bank and GT Capital
Can any of the company-specific risk be diversified away by investing in both Union Bank and GT Capital 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 GT Capital 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 GT Capital Holdings, you can compare the effects of market volatilities on Union Bank and GT Capital 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 GT Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and GT Capital.
Diversification Opportunities for Union Bank and GT Capital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and GTCAP is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and GT Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GT Capital Holdings 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 GT Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GT Capital Holdings has no effect on the direction of Union Bank i.e., Union Bank and GT Capital go up and down completely randomly.
Pair Corralation between Union Bank and GT Capital
Assuming the 90 days trading horizon Union Bank of is expected to generate 0.52 times more return on investment than GT Capital. However, Union Bank of is 1.92 times less risky than GT Capital. It trades about -0.15 of its potential returns per unit of risk. GT Capital Holdings is currently generating about -0.21 per unit of risk. If you would invest 3,810 in Union Bank of on September 3, 2024 and sell it today you would lose (130.00) from holding Union Bank of or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Bank of vs. GT Capital Holdings
Performance |
| Timeline |
| Union Bank |
| GT Capital Holdings |
Union Bank and GT Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and GT Capital
The main advantage of trading using opposite Union Bank and GT Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, GT Capital 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 GT Capital will offset losses from the drop in GT Capital's long position.| Union Bank vs. Converge Information Communications | Union Bank vs. Top Frontier Investment | Union Bank vs. Crown Asia Chemicals | Union Bank vs. Figaro Coffee Group |
| GT Capital vs. Metropolitan Bank Trust | GT Capital vs. Union Bank of | GT Capital vs. Semirara Mining Corp | GT Capital vs. Concepcion Industrial 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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