Correlation Between UNITY BANK and CUSTODIAN INVESTMENT

Can any of the company-specific risk be diversified away by investing in both UNITY BANK and CUSTODIAN INVESTMENT 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 UNITY BANK and CUSTODIAN INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNITY BANK PLC and CUSTODIAN INVESTMENT PLC, you can compare the effects of market volatilities on UNITY BANK and CUSTODIAN INVESTMENT 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 UNITY BANK with a short position of CUSTODIAN INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITY BANK and CUSTODIAN INVESTMENT.

Diversification Opportunities for UNITY BANK and CUSTODIAN INVESTMENT

0.0

Correlation Coefficient

UNITY BANK  CUSTODIAN INVESTMENT

Pay attention - limited upside

The 3 months correlation between UNITY and CUSTODIAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UNITY BANK PLC and CUSTODIAN INVESTMENT PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUSTODIAN INVESTMENT PLC and UNITY 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 UNITY BANK PLC are associated (or correlated) with CUSTODIAN INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUSTODIAN INVESTMENT PLC has no effect on the direction of UNITY BANK i.e., UNITY BANK and CUSTODIAN INVESTMENT go up and down completely randomly.

Pair Corralation between UNITY BANK and CUSTODIAN INVESTMENT

If you would invest  1,280  in CUSTODIAN INVESTMENT PLC on October 11, 2024 and sell it today you would earn a total of  520.00  from holding CUSTODIAN INVESTMENT PLC or generate 40.63% return on investment over 90 days.

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

UNITY BANK PLC  vs.  CUSTODIAN INVESTMENT PLC

UNITY BANK PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITY BANK PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, UNITY BANK is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CUSTODIAN INVESTMENT PLC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CUSTODIAN INVESTMENT PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, CUSTODIAN INVESTMENT demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNITY BANK and CUSTODIAN INVESTMENT

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

The idea behind UNITY BANK PLC and CUSTODIAN INVESTMENT PLC 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.