Correlation Between BDO Unibank and East West
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and East West 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 East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and East West Banking, you can compare the effects of market volatilities on BDO Unibank and East West 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 East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and East West.
Diversification Opportunities for BDO Unibank and East West
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BDO and East is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and East West Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Banking 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 East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Banking has no effect on the direction of BDO Unibank i.e., BDO Unibank and East West go up and down completely randomly.
Pair Corralation between BDO Unibank and East West
Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the East West. In addition to that, BDO Unibank is 2.04 times more volatile than East West Banking. It trades about -0.11 of its total potential returns per unit of risk. East West Banking is currently generating about -0.12 per unit of volatility. If you would invest 1,010 in East West Banking on August 25, 2024 and sell it today you would lose (34.00) from holding East West Banking or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank vs. East West Banking
Performance |
| Timeline |
| BDO Unibank |
| East West Banking |
BDO Unibank and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and East West
The main advantage of trading using opposite BDO Unibank and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| BDO Unibank vs. Metro Retail Stores | BDO Unibank vs. Transpacific Broadband Group | BDO Unibank vs. Jollibee Foods Corp | BDO Unibank vs. Pacificonline Systems |
| East West vs. Robinsons Retail Holdings | East West vs. Converge Information Communications | East West vs. Atlas Consolidated Mining | East West vs. Lepanto Consolidated Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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