Correlation Between Union Bank and THE PHILIPPINE
Can any of the company-specific risk be diversified away by investing in both Union Bank and THE PHILIPPINE 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 THE PHILIPPINE 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 THE PHILIPPINE STOCK, you can compare the effects of market volatilities on Union Bank and THE PHILIPPINE 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 THE PHILIPPINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and THE PHILIPPINE.
Diversification Opportunities for Union Bank and THE PHILIPPINE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and THE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and THE PHILIPPINE STOCK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THE PHILIPPINE STOCK 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 THE PHILIPPINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THE PHILIPPINE STOCK has no effect on the direction of Union Bank i.e., Union Bank and THE PHILIPPINE go up and down completely randomly.
Pair Corralation between Union Bank and THE PHILIPPINE
Assuming the 90 days trading horizon Union Bank of is expected to under-perform the THE PHILIPPINE. In addition to that, Union Bank is 2.05 times more volatile than THE PHILIPPINE STOCK. It trades about -0.04 of its total potential returns per unit of risk. THE PHILIPPINE STOCK is currently generating about 0.01 per unit of volatility. If you would invest 656,680 in THE PHILIPPINE STOCK on September 5, 2024 and sell it today you would earn a total of 16,741 from holding THE PHILIPPINE STOCK or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.77% |
| Values | Daily Returns |
Union Bank of vs. THE PHILIPPINE STOCK
Performance |
| Timeline |
Union Bank and THE PHILIPPINE Volatility Contrast
Predicted Return Density |
| Returns |
Union Bank of
Pair trading matchups for Union Bank
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Pair Trading with Union Bank and THE PHILIPPINE
The main advantage of trading using opposite Union Bank and THE PHILIPPINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, THE PHILIPPINE 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 THE PHILIPPINE will offset losses from the drop in THE PHILIPPINE's long position.| Union Bank vs. Security Bank Corp | Union Bank vs. Philippine National Bank | Union Bank vs. Philippine Savings Bank | Union Bank vs. Philippine Business Bank |
| THE PHILIPPINE vs. SM Investments Corp | THE PHILIPPINE vs. Metropolitan Bank Trust | THE PHILIPPINE vs. Premiere Entertainment | THE PHILIPPINE vs. COL Financial Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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