Correlation Between Union Bank and Semirara Mining

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

By analyzing existing cross correlation between Union Bank of and Semirara Mining Corp, you can compare the effects of market volatilities on Union Bank and Semirara Mining 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 Semirara Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Semirara Mining.

Diversification Opportunities for Union Bank and Semirara Mining

-0.6

Correlation Coefficient

Union Bank  Semirara Mining

Excellent diversification

The 3 months correlation between Union and Semirara is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Semirara Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semirara Mining Corp 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 of are associated (or correlated) with Semirara Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semirara Mining Corp has no effect on the direction of Union Bank i.e., Union Bank and Semirara Mining go up and down completely randomly.

Pair Corralation between Union Bank and Semirara Mining

Assuming the 90 days trading horizon Union Bank is expected to generate 8.43 times less return on investment than Semirara Mining. In addition to that, Union Bank is 1.43 times more volatile than Semirara Mining Corp. It trades about 0.03 of its total potential returns per unit of risk. Semirara Mining Corp is currently generating about 0.4 per unit of volatility. If you would invest  3,300  in Semirara Mining Corp on October 22, 2024 and sell it today you would earn a total of  270.00  from holding Semirara Mining Corp or generate 8.18% return on investment over 90 days.

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

Union Bank of  vs.  Semirara Mining Corp

Union Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Semirara Mining Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semirara Mining Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Semirara Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Union Bank and Semirara Mining

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

The idea behind Union Bank of and Semirara Mining Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.