Correlation Between Benguet Corp and Dizon Copper
Can any of the company-specific risk be diversified away by investing in both Benguet Corp and Dizon Copper 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 Benguet Corp and Dizon Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benguet Corp A and Dizon Copper Silver, you can compare the effects of market volatilities on Benguet Corp and Dizon Copper 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 Benguet Corp with a short position of Dizon Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benguet Corp and Dizon Copper.
Diversification Opportunities for Benguet Corp and Dizon Copper
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Benguet and Dizon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Benguet Corp A and Dizon Copper Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dizon Copper Silver and Benguet Corp 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 Benguet Corp A are associated (or correlated) with Dizon Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dizon Copper Silver has no effect on the direction of Benguet Corp i.e., Benguet Corp and Dizon Copper go up and down completely randomly.
Pair Corralation between Benguet Corp and Dizon Copper
Assuming the 90 days trading horizon Benguet Corp A is expected to generate 1.5 times more return on investment than Dizon Copper. However, Benguet Corp is 1.5 times more volatile than Dizon Copper Silver. It trades about 0.04 of its potential returns per unit of risk. Dizon Copper Silver is currently generating about -0.76 per unit of risk. If you would invest 375.00 in Benguet Corp A on August 28, 2024 and sell it today you would earn a total of 5.00 from holding Benguet Corp A or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.58% |
| Values | Daily Returns |
Benguet Corp A vs. Dizon Copper Silver
Performance |
| Timeline |
| Benguet Corp A |
| Dizon Copper Silver |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Benguet Corp and Dizon Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benguet Corp and Dizon Copper
The main advantage of trading using opposite Benguet Corp and Dizon Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benguet Corp position performs unexpectedly, Dizon Copper 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 Dizon Copper will offset losses from the drop in Dizon Copper's long position.| Benguet Corp vs. Bank of the | Benguet Corp vs. Philex Mining Corp | Benguet Corp vs. Robinsons Retail Holdings | Benguet Corp vs. Philippine Business Bank |
| Dizon Copper vs. Figaro Coffee Group | Dizon Copper vs. Alliance Select Foods | Dizon Copper vs. SM Investments Corp | Dizon Copper vs. Premiere Entertainment |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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