Correlation Between Union Bank and Security Bank

Can any of the company-specific risk be diversified away by investing in both Union Bank and Security Bank 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 Security Bank 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 Security Bank Corp, you can compare the effects of market volatilities on Union Bank and Security 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 Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Bank and Security Bank.

Diversification Opportunities for Union Bank and Security Bank

-0.37

Correlation Coefficient

Union Bank  Security Bank

Very good diversification

The 3 months correlation between Union and Security is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Union Bank of and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank 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 Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Union Bank i.e., Union Bank and Security Bank go up and down completely randomly.

Pair Corralation between Union Bank and Security Bank

Assuming the 90 days trading horizon Union Bank of is expected to under-perform the Security Bank. But the stock apears to be less risky and, when comparing its historical volatility, Union Bank of is 1.71 times less risky than Security Bank. The stock trades about -0.02 of its potential returns per unit of risk. The Security Bank Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6,380  in Security Bank Corp on April 20, 2025 and sell it today you would earn a total of  950.00  from holding Security Bank Corp or generate 14.89% return on investment over 90 days.

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

Union Bank of  vs.  Security Bank Corp

Union Bank

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, Union Bank is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Security Bank Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Security Bank Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Security Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Union Bank and Security Bank

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

The idea behind Union Bank of and Security Bank 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.