Correlation Between Bandhan Bank and Union Bank

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

By analyzing existing cross correlation between Bandhan Bank Limited and Union Bank of, you can compare the effects of market volatilities on Bandhan Bank and Union 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 Bandhan Bank with a short position of Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bandhan Bank and Union Bank.

Diversification Opportunities for Bandhan Bank and Union Bank

0.75

Correlation Coefficient

Bandhan Bank  Union Bank

Poor diversification

The 3 months correlation between Bandhan and Union is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bandhan Bank Limited and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank and Bandhan 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 Bandhan Bank Limited are associated (or correlated) with Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of Bandhan Bank i.e., Bandhan Bank and Union Bank go up and down completely randomly.

Pair Corralation between Bandhan Bank and Union Bank

Assuming the 90 days trading horizon Bandhan Bank is expected to generate 2.37 times less return on investment than Union Bank. In addition to that, Bandhan Bank is 1.02 times more volatile than Union Bank of. It trades about 0.04 of its total potential returns per unit of risk. Union Bank of is currently generating about 0.1 per unit of volatility. If you would invest  11,459  in Union Bank of on May 7, 2025 and sell it today you would earn a total of  1,339  from holding Union Bank of or generate 11.69% return on investment over 90 days.

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

Bandhan Bank Limited  vs.  Union Bank of

Bandhan Bank Limited

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Bandhan Bank Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Bandhan Bank is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Union Bank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Union Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Union Bank may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Bandhan Bank and Union Bank

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

The idea behind Bandhan Bank Limited and Union Bank of 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.