Correlation Between BDO Unibank and AgriNurture
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and AgriNurture 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 BDO Unibank and AgriNurture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and AgriNurture, you can compare the effects of market volatilities on BDO Unibank and AgriNurture 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 BDO Unibank with a short position of AgriNurture. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and AgriNurture.
Diversification Opportunities for BDO Unibank and AgriNurture
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BDO and AgriNurture is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and AgriNurture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriNurture and BDO Unibank 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 BDO Unibank are associated (or correlated) with AgriNurture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriNurture has no effect on the direction of BDO Unibank i.e., BDO Unibank and AgriNurture go up and down completely randomly.
Pair Corralation between BDO Unibank and AgriNurture
Assuming the 90 days trading horizon BDO Unibank is expected to generate 1.03 times more return on investment than AgriNurture. However, BDO Unibank is 1.03 times more volatile than AgriNurture. It trades about 0.05 of its potential returns per unit of risk. AgriNurture is currently generating about -0.14 per unit of risk. If you would invest 15,150 in BDO Unibank on September 3, 2024 and sell it today you would earn a total of 300.00 from holding BDO Unibank or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank vs. AgriNurture
Performance |
| Timeline |
| BDO Unibank |
| AgriNurture |
BDO Unibank and AgriNurture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and AgriNurture
The main advantage of trading using opposite BDO Unibank and AgriNurture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, AgriNurture 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 AgriNurture will offset losses from the drop in AgriNurture's long position.| BDO Unibank vs. COL Financial Group | BDO Unibank vs. Rizal Commercial Banking | BDO Unibank vs. SM Investments Corp | BDO Unibank vs. STI Education Systems |
| AgriNurture vs. COL Financial Group | AgriNurture vs. Philex Mining Corp | AgriNurture vs. BDO Unibank | AgriNurture vs. Metropolitan Bank Trust |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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