Correlation Between Yuanta Financial and Union Bank

Can any of the company-specific risk be diversified away by investing in both Yuanta Financial and Union 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 Yuanta Financial and Union Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yuanta Financial Holdings and Union Bank of, you can compare the effects of market volatilities on Yuanta Financial and Union 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 Yuanta Financial with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanta Financial and Union Bank.

Diversification Opportunities for Yuanta Financial and Union Bank

-0.03

Correlation Coefficient

Yuanta Financial  Union Bank

Good diversification

The 3 months correlation between Yuanta and Union is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Yuanta Financial Holdings and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Yuanta Financial 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 Yuanta Financial Holdings are associated (or correlated) with Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of Yuanta Financial i.e., Yuanta Financial and Union Bank go up and down completely randomly.

Pair Corralation between Yuanta Financial and Union Bank

Assuming the 90 days trading horizon Yuanta Financial is expected to generate 19.95 times less return on investment than Union Bank. In addition to that, Yuanta Financial is 1.4 times more volatile than Union Bank of. It trades about 0.01 of its total potential returns per unit of risk. Union Bank of is currently generating about 0.28 per unit of volatility. If you would invest  1,525  in Union Bank of on December 30, 2024 and sell it today you would earn a total of  200.00  from holding Union Bank of or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Yuanta Financial Holdings  vs.  Union Bank of

Yuanta Financial Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yuanta Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yuanta Financial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Union Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Union Bank of are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Union Bank showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yuanta Financial and Union Bank

The main advantage of trading using opposite Yuanta Financial and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuanta Financial position performs unexpectedly, Union 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 Union Bank will offset losses from the drop in Union Bank's long position.

The idea behind Yuanta Financial Holdings and Union Bank of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.