Correlation Between United Overseas and Chiba Bank
Can any of the company-specific risk be diversified away by investing in both United Overseas and Chiba Bank 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 United Overseas and Chiba Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and Chiba Bank Ltd, you can compare the effects of market volatilities on United Overseas and Chiba 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 United Overseas with a short position of Chiba Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and Chiba Bank.
Diversification Opportunities for United Overseas and Chiba Bank
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Chiba is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank and Chiba Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiba Bank and United Overseas 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 United Overseas Bank are associated (or correlated) with Chiba Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiba Bank has no effect on the direction of United Overseas i.e., United Overseas and Chiba Bank go up and down completely randomly.
Pair Corralation between United Overseas and Chiba Bank
If you would invest 4,920 in United Overseas Bank on August 25, 2024 and sell it today you would earn a total of 484.00 from holding United Overseas Bank or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Overseas Bank vs. Chiba Bank Ltd
Performance |
| Timeline |
| United Overseas Bank |
| Chiba Bank |
United Overseas and Chiba Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Overseas and Chiba Bank
The main advantage of trading using opposite United Overseas and Chiba Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas position performs unexpectedly, Chiba 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 Chiba Bank will offset losses from the drop in Chiba Bank's long position.| United Overseas vs. KBC Groep NV | United Overseas vs. DBS Group Holdings | United Overseas vs. HomeStreet | United Overseas vs. Bank of Hawaii |
| Chiba Bank vs. Standard Bank Group | Chiba Bank vs. Bank Central Asia | Chiba Bank vs. PSB Holdings | Chiba Bank vs. United Overseas Bank |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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