Correlation Between Benguet Corp and Philex Mining
Can any of the company-specific risk be diversified away by investing in both Benguet Corp and Philex Mining 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 Philex Mining 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 Philex Mining Corp, you can compare the effects of market volatilities on Benguet Corp and Philex Mining 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 Philex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benguet Corp and Philex Mining.
Diversification Opportunities for Benguet Corp and Philex Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Benguet and Philex is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Benguet Corp A and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp 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 Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of Benguet Corp i.e., Benguet Corp and Philex Mining go up and down completely randomly.
Pair Corralation between Benguet Corp and Philex Mining
Assuming the 90 days trading horizon Benguet Corp A is expected to generate 1.96 times more return on investment than Philex Mining. However, Benguet Corp is 1.96 times more volatile than Philex Mining Corp. It trades about -0.11 of its potential returns per unit of risk. Philex Mining Corp is currently generating about -0.37 per unit of risk. If you would invest 392.00 in Benguet Corp A on September 1, 2024 and sell it today you would lose (42.00) from holding Benguet Corp A or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Benguet Corp A vs. Philex Mining Corp
Performance |
| Timeline |
| Benguet Corp A |
| Philex Mining Corp |
Benguet Corp and Philex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benguet Corp and Philex Mining
The main advantage of trading using opposite Benguet Corp and Philex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benguet Corp position performs unexpectedly, Philex Mining 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 Philex Mining will offset losses from the drop in Philex Mining's long position.The idea behind Benguet Corp A and Philex Mining Corp 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.| Philex Mining vs. Figaro Coffee Group | Philex Mining vs. Lepanto Consolidated Mining | Philex Mining vs. Cebu Air Preferred | Philex Mining vs. SM Investments 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 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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