Correlation Between BDO Unibank and DM WENCESLAO
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and DM WENCESLAO 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 DM WENCESLAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and DM WENCESLAO ASSOCIATES, you can compare the effects of market volatilities on BDO Unibank and DM WENCESLAO 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 DM WENCESLAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and DM WENCESLAO.
Diversification Opportunities for BDO Unibank and DM WENCESLAO
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between BDO and DMW is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and DM WENCESLAO ASSOCIATES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DM WENCESLAO ASSOCIATES 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 DM WENCESLAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DM WENCESLAO ASSOCIATES has no effect on the direction of BDO Unibank i.e., BDO Unibank and DM WENCESLAO go up and down completely randomly.
Pair Corralation between BDO Unibank and DM WENCESLAO
Assuming the 90 days trading horizon BDO Unibank is expected to generate 0.55 times more return on investment than DM WENCESLAO. However, BDO Unibank is 1.83 times less risky than DM WENCESLAO. It trades about 0.23 of its potential returns per unit of risk. DM WENCESLAO ASSOCIATES is currently generating about 0.01 per unit of risk. If you would invest 13,720 in BDO Unibank on September 15, 2024 and sell it today you would earn a total of 1,280 from holding BDO Unibank or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank vs. DM WENCESLAO ASSOCIATES
Performance |
| Timeline |
| BDO Unibank |
| DM WENCESLAO ASSOCIATES |
BDO Unibank and DM WENCESLAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and DM WENCESLAO
The main advantage of trading using opposite BDO Unibank and DM WENCESLAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, DM WENCESLAO 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 DM WENCESLAO will offset losses from the drop in DM WENCESLAO's long position.| BDO Unibank vs. Security Bank Corp | BDO Unibank vs. Union Bank of | BDO Unibank vs. Philippine National Bank | BDO Unibank vs. Asia United Bank |
| DM WENCESLAO vs. Asia United Bank | DM WENCESLAO vs. Union Bank of | DM WENCESLAO vs. Converge Information Communications | DM WENCESLAO vs. Semirara Mining 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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