Correlation Between Union Chemicals and COMMERCIAL BANK
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By analyzing existing cross correlation between Union Chemicals Lanka and COMMERCIAL BANK OF, you can compare the effects of market volatilities on Union Chemicals and COMMERCIAL BANK 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 Chemicals with a short position of COMMERCIAL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Chemicals and COMMERCIAL BANK.
Diversification Opportunities for Union Chemicals and COMMERCIAL BANK
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and COMMERCIAL is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Union Chemicals Lanka and COMMERCIAL BANK OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL BANK and Union Chemicals 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 Chemicals Lanka are associated (or correlated) with COMMERCIAL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL BANK has no effect on the direction of Union Chemicals i.e., Union Chemicals and COMMERCIAL BANK go up and down completely randomly.
Pair Corralation between Union Chemicals and COMMERCIAL BANK
Assuming the 90 days trading horizon Union Chemicals is expected to generate 2.1 times less return on investment than COMMERCIAL BANK. But when comparing it to its historical volatility, Union Chemicals Lanka is 1.13 times less risky than COMMERCIAL BANK. It trades about 0.05 of its potential returns per unit of risk. COMMERCIAL BANK OF is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,040 in COMMERCIAL BANK OF on August 31, 2024 and sell it today you would earn a total of 5,410 from holding COMMERCIAL BANK OF or generate 133.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 64.91% |
| Values | Daily Returns |
Union Chemicals Lanka vs. COMMERCIAL BANK OF
Performance |
| Timeline |
| Union Chemicals Lanka |
| COMMERCIAL BANK |
Union Chemicals and COMMERCIAL BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Chemicals and COMMERCIAL BANK
The main advantage of trading using opposite Union Chemicals and COMMERCIAL BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Chemicals position performs unexpectedly, COMMERCIAL BANK 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 COMMERCIAL BANK will offset losses from the drop in COMMERCIAL BANK's long position.| Union Chemicals vs. HATTON NATIONAL BANK | Union Chemicals vs. Citrus Leisure PLC | Union Chemicals vs. Ceylinco Insurance PLC | Union Chemicals vs. CEYLINCO INSURANCE PLC |
| COMMERCIAL BANK vs. HNB Finance | COMMERCIAL BANK vs. Prime Lands Residencies | COMMERCIAL BANK vs. Jat Holdings PLC | COMMERCIAL BANK vs. E M L |
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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