Correlation Between Union Bank and State Bank
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By analyzing existing cross correlation between Union Bank of and State Bank of, you can compare the effects of market volatilities on Union Bank and State 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 Union Bank with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and State Bank.
Diversification Opportunities for Union Bank and State Bank
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Union and State is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Union Bank i.e., Union Bank and State Bank go up and down completely randomly.
Pair Corralation between Union Bank and State Bank
Assuming the 90 days trading horizon Union Bank of is expected to generate 1.32 times more return on investment than State Bank. However, Union Bank is 1.32 times more volatile than State Bank of. It trades about -0.01 of its potential returns per unit of risk. State Bank of is currently generating about -0.05 per unit of risk. If you would invest 11,166 in Union Bank of on October 21, 2024 and sell it today you would lose (296.00) from holding Union Bank of or give up 2.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Union Bank of vs. State Bank of
Performance |
Timeline |
Union Bank |
State Bank |
Union Bank and State Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Union Bank and State Bank
The main advantage of trading using opposite Union Bank and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Bank position performs unexpectedly, State 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 State Bank will offset losses from the drop in State Bank's long position.Union Bank vs. Global Health Limited | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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