Correlation Between BDO Unibank and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and Integrated Micro 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 Integrated Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and Integrated Micro Electronics, you can compare the effects of market volatilities on BDO Unibank and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Integrated Micro.
Diversification Opportunities for BDO Unibank and Integrated Micro
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BDO and Integrated is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of BDO Unibank i.e., BDO Unibank and Integrated Micro go up and down completely randomly.
Pair Corralation between BDO Unibank and Integrated Micro
Assuming the 90 days trading horizon BDO Unibank is expected to generate 0.98 times more return on investment than Integrated Micro. However, BDO Unibank is 1.02 times less risky than Integrated Micro. It trades about -0.07 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.09 per unit of risk. If you would invest 16,000 in BDO Unibank on August 29, 2024 and sell it today you would lose (710.00) from holding BDO Unibank or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank vs. Integrated Micro Electronics
Performance |
| Timeline |
| BDO Unibank |
| Integrated Micro Ele |
BDO Unibank and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and Integrated Micro
The main advantage of trading using opposite BDO Unibank and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| BDO Unibank vs. Lepanto Consolidated Mining | BDO Unibank vs. Apex Mining Co | BDO Unibank vs. Sun Life Financial | BDO Unibank vs. Asia United Bank |
| Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp | Integrated Micro vs. PXP Energy 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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