Correlation Between Union Bank and HNB Finance
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By analyzing existing cross correlation between Union Bank and HNB Finance, you can compare the effects of market volatilities on Union Bank and HNB Finance 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 HNB Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and HNB Finance.
Diversification Opportunities for Union Bank and HNB Finance
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and HNB is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank and HNB Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNB Finance 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 are associated (or correlated) with HNB Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNB Finance has no effect on the direction of Union Bank i.e., Union Bank and HNB Finance go up and down completely randomly.
Pair Corralation between Union Bank and HNB Finance
Assuming the 90 days trading horizon Union Bank is expected to generate 0.26 times more return on investment than HNB Finance. However, Union Bank is 3.81 times less risky than HNB Finance. It trades about 0.3 of its potential returns per unit of risk. HNB Finance is currently generating about -0.08 per unit of risk. If you would invest 950.00 in Union Bank on September 25, 2024 and sell it today you would earn a total of 110.00 from holding Union Bank or generate 11.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Union Bank vs. HNB Finance
Performance |
Timeline |
Union Bank |
HNB Finance |
Union Bank and HNB Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Union Bank and HNB Finance
The main advantage of trading using opposite Union Bank and HNB Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, HNB Finance 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 HNB Finance will offset losses from the drop in HNB Finance's long position.Union Bank vs. HNB Finance | Union Bank vs. Prime Lands Residencies | Union Bank vs. Jat Holdings PLC | Union Bank vs. Lanka Credit and |
HNB Finance vs. Prime Lands Residencies | HNB Finance vs. Jat Holdings PLC | HNB Finance vs. Lanka Credit and | HNB Finance vs. VIDULLANKA PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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