Correlation Between Atlas Consolidated and THE PHILIPPINE
Can any of the company-specific risk be diversified away by investing in both Atlas Consolidated and THE PHILIPPINE 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 Atlas Consolidated and THE PHILIPPINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Consolidated Mining and THE PHILIPPINE STOCK, you can compare the effects of market volatilities on Atlas Consolidated and THE PHILIPPINE 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 Atlas Consolidated with a short position of THE PHILIPPINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Consolidated and THE PHILIPPINE.
Diversification Opportunities for Atlas Consolidated and THE PHILIPPINE
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atlas and THE is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Consolidated Mining and THE PHILIPPINE STOCK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THE PHILIPPINE STOCK and Atlas Consolidated 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 Atlas Consolidated Mining are associated (or correlated) with THE PHILIPPINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THE PHILIPPINE STOCK has no effect on the direction of Atlas Consolidated i.e., Atlas Consolidated and THE PHILIPPINE go up and down completely randomly.
Pair Corralation between Atlas Consolidated and THE PHILIPPINE
Assuming the 90 days trading horizon Atlas Consolidated Mining is expected to under-perform the THE PHILIPPINE. In addition to that, Atlas Consolidated is 1.32 times more volatile than THE PHILIPPINE STOCK. It trades about -0.39 of its total potential returns per unit of risk. THE PHILIPPINE STOCK is currently generating about -0.26 per unit of volatility. If you would invest 714,296 in THE PHILIPPINE STOCK on September 1, 2024 and sell it today you would lose (52,911) from holding THE PHILIPPINE STOCK or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas Consolidated Mining vs. THE PHILIPPINE STOCK
Performance |
| Timeline |
Atlas Consolidated and THE PHILIPPINE Volatility Contrast
Predicted Return Density |
| Returns |
Atlas Consolidated Mining
Pair trading matchups for Atlas Consolidated
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Pair Trading with Atlas Consolidated and THE PHILIPPINE
The main advantage of trading using opposite Atlas Consolidated and THE PHILIPPINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Consolidated position performs unexpectedly, THE PHILIPPINE 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 THE PHILIPPINE will offset losses from the drop in THE PHILIPPINE's long position.The idea behind Atlas Consolidated Mining and THE PHILIPPINE STOCK 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.| THE PHILIPPINE vs. Apex Mining Co | THE PHILIPPINE vs. Lepanto Consolidated Mining | THE PHILIPPINE vs. Premiere Entertainment | THE PHILIPPINE vs. Jollibee Foods Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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