Correlation Between Union Bank and STI Education
Can any of the company-specific risk be diversified away by investing in both Union Bank and STI Education 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 STI Education 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 STI Education Systems, you can compare the effects of market volatilities on Union Bank and STI Education 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 STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and STI Education.
Diversification Opportunities for Union Bank and STI Education
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and STI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems 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 STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Union Bank i.e., Union Bank and STI Education go up and down completely randomly.
Pair Corralation between Union Bank and STI Education
Assuming the 90 days trading horizon Union Bank of is expected to under-perform the STI Education. But the stock apears to be less risky and, when comparing its historical volatility, Union Bank of is 1.29 times less risky than STI Education. The stock trades about -0.04 of its potential returns per unit of risk. The STI Education Systems is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 29.00 in STI Education Systems on August 25, 2024 and sell it today you would earn a total of 99.00 from holding STI Education Systems or generate 341.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.55% |
| Values | Daily Returns |
Union Bank of vs. STI Education Systems
Performance |
| Timeline |
| Union Bank |
| STI Education Systems |
Union Bank and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Bank and STI Education
The main advantage of trading using opposite Union Bank and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, STI Education 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 STI Education will offset losses from the drop in STI Education's long position.| Union Bank vs. Premiere Entertainment | Union Bank vs. Philex Mining Corp | Union Bank vs. Apex Mining Co | Union Bank vs. Lepanto Consolidated Mining |
| STI Education vs. Allhome Corp | STI Education vs. Altus Property Ventures | STI Education vs. Wilcon Depot | STI Education vs. Security Bank 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |