Correlation Between Asia United and Cirtek Holdings
Can any of the company-specific risk be diversified away by investing in both Asia United and Cirtek Holdings 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 Cirtek Holdings 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 Cirtek Holdings Philippines, you can compare the effects of market volatilities on Asia United and Cirtek Holdings 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 Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and Cirtek Holdings.
Diversification Opportunities for Asia United and Cirtek Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asia and Cirtek is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil 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 Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Asia United i.e., Asia United and Cirtek Holdings go up and down completely randomly.
Pair Corralation between Asia United and Cirtek Holdings
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.3 times more return on investment than Cirtek Holdings. However, Asia United Bank is 3.33 times less risky than Cirtek Holdings. It trades about 0.14 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.01 per unit of risk. If you would invest 2,400 in Asia United Bank on August 29, 2024 and sell it today you would earn a total of 3,900 from holding Asia United Bank or generate 162.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 49.66% |
| Values | Daily Returns |
Asia United Bank vs. Cirtek Holdings Philippines
Performance |
| Timeline |
| Asia United Bank |
| Cirtek Holdings Phil |
Asia United and Cirtek Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and Cirtek Holdings
The main advantage of trading using opposite Asia United and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, Cirtek Holdings 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 Cirtek Holdings will offset losses from the drop in Cirtek Holdings' long position.The idea behind Asia United Bank and Cirtek Holdings Philippines 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.| Cirtek Holdings vs. Asia United Bank | Cirtek Holdings vs. Robinsons Retail Holdings | Cirtek Holdings vs. Alliance Select Foods | Cirtek Holdings vs. Transpacific Broadband Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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