Correlation Between Chailease Holding and Union Bank

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

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

Diversification Opportunities for Chailease Holding and Union Bank

0.72

Correlation Coefficient

Chailease Holding  Union Bank

Poor diversification

The 3 months correlation between Chailease and Union is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Chailease Holding 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 Chailease Holding Co 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 Chailease Holding i.e., Chailease Holding and Union Bank go up and down completely randomly.

Pair Corralation between Chailease Holding and Union Bank

Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Union Bank. In addition to that, Chailease Holding is 1.78 times more volatile than Union Bank of. It trades about -0.05 of its total potential returns per unit of risk. Union Bank of is currently generating about 0.03 per unit of volatility. If you would invest  1,485  in Union Bank of on December 4, 2024 and sell it today you would earn a total of  105.00  from holding Union Bank of or generate 7.07% return on investment over 90 days.

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

Chailease Holding Co  vs.  Union Bank of

Chailease Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chailease Holding Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chailease Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Union Bank

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Union Bank of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Union Bank is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chailease Holding and Union Bank

The main advantage of trading using opposite Chailease Holding and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chailease Holding 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 Chailease Holding Co 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.