Correlation Between BDO Unibank and BRNPB
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and BRNPB 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 BRNPB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and BRNPB, you can compare the effects of market volatilities on BDO Unibank and BRNPB 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 BRNPB. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and BRNPB.
Diversification Opportunities for BDO Unibank and BRNPB
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BDO and BRNPB is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and BRNPB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRNPB 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 BRNPB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRNPB has no effect on the direction of BDO Unibank i.e., BDO Unibank and BRNPB go up and down completely randomly.
Pair Corralation between BDO Unibank and BRNPB
Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the BRNPB. In addition to that, BDO Unibank is 2.18 times more volatile than BRNPB. It trades about -0.03 of its total potential returns per unit of risk. BRNPB is currently generating about 0.41 per unit of volatility. If you would invest 10,700 in BRNPB on August 30, 2024 and sell it today you would earn a total of 300.00 from holding BRNPB or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 27.27% |
| Values | Daily Returns |
BDO Unibank vs. BRNPB
Performance |
| Timeline |
| BDO Unibank |
| BRNPB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
BDO Unibank and BRNPB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and BRNPB
The main advantage of trading using opposite BDO Unibank and BRNPB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, BRNPB 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 BRNPB will offset losses from the drop in BRNPB's long position.| BDO Unibank vs. Converge Information Communications | BDO Unibank vs. Lepanto Consolidated Mining | BDO Unibank vs. Manila Mining Corp | BDO Unibank vs. Crown Asia Chemicals |
| BRNPB vs. Sun Life Financial | BRNPB vs. Philex Mining Corp | BRNPB vs. Philippine Savings Bank | BRNPB vs. Asia United 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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