Correlation Between United Overseas and China Minsh
Can any of the company-specific risk be diversified away by investing in both United Overseas and China Minsh 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 United Overseas and China Minsh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Overseas Bank and China Minsh, you can compare the effects of market volatilities on United Overseas and China Minsh 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 United Overseas with a short position of China Minsh. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Overseas and China Minsh.
Diversification Opportunities for United Overseas and China Minsh
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and China is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding United Overseas Bank and China Minsh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsh and United Overseas 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 United Overseas Bank are associated (or correlated) with China Minsh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsh has no effect on the direction of United Overseas i.e., United Overseas and China Minsh go up and down completely randomly.
Pair Corralation between United Overseas and China Minsh
Assuming the 90 days horizon United Overseas Bank is expected to under-perform the China Minsh. But the pink sheet apears to be less risky and, when comparing its historical volatility, United Overseas Bank is 1.53 times less risky than China Minsh. The pink sheet trades about -0.05 of its potential returns per unit of risk. The China Minsh is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 376.00 in China Minsh on September 26, 2024 and sell it today you would earn a total of 22.00 from holding China Minsh or generate 5.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
United Overseas Bank vs. China Minsh
Performance |
Timeline |
United Overseas Bank |
China Minsh |
United Overseas and China Minsh Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Overseas and China Minsh
The main advantage of trading using opposite United Overseas and China Minsh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Overseas position performs unexpectedly, China Minsh 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 China Minsh will offset losses from the drop in China Minsh's long position.United Overseas vs. Citizens Financial Corp | United Overseas vs. Farmers Bancorp | United Overseas vs. Alpine Banks of | United Overseas vs. Taylor Calvin B |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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