Correlation Between Asia United and Pacificonline Systems
Can any of the company-specific risk be diversified away by investing in both Asia United and Pacificonline Systems 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 Asia United and Pacificonline Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and Pacificonline Systems, you can compare the effects of market volatilities on Asia United and Pacificonline Systems 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 Asia United with a short position of Pacificonline Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Pacificonline Systems.
Diversification Opportunities for Asia United and Pacificonline Systems
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asia and Pacificonline is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Pacificonline Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacificonline Systems and Asia United 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 Asia United Bank are associated (or correlated) with Pacificonline Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacificonline Systems has no effect on the direction of Asia United i.e., Asia United and Pacificonline Systems go up and down completely randomly.
Pair Corralation between Asia United and Pacificonline Systems
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.19 times more return on investment than Pacificonline Systems. However, Asia United Bank is 5.2 times less risky than Pacificonline Systems. It trades about 0.07 of its potential returns per unit of risk. Pacificonline Systems is currently generating about -0.2 per unit of risk. If you would invest 6,180 in Asia United Bank on September 1, 2024 and sell it today you would earn a total of 70.00 from holding Asia United Bank or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia United Bank vs. Pacificonline Systems
Performance |
| Timeline |
| Asia United Bank |
| Pacificonline Systems |
Asia United and Pacificonline Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Pacificonline Systems
The main advantage of trading using opposite Asia United and Pacificonline Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Pacificonline Systems 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 Pacificonline Systems will offset losses from the drop in Pacificonline Systems' long position.| Asia United vs. Metropolitan Bank Trust | Asia United vs. Philippine National Bank | Asia United vs. Philippine Savings Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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