Correlation Between BDO Unibank and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and Metropolitan Bank 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 Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank and Metropolitan Bank Trust, you can compare the effects of market volatilities on BDO Unibank and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Metropolitan Bank.
Diversification Opportunities for BDO Unibank and Metropolitan Bank
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BDO and Metropolitan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of BDO Unibank i.e., BDO Unibank and Metropolitan Bank go up and down completely randomly.
Pair Corralation between BDO Unibank and Metropolitan Bank
Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the Metropolitan Bank. In addition to that, BDO Unibank is 1.34 times more volatile than Metropolitan Bank Trust. It trades about -0.13 of its total potential returns per unit of risk. Metropolitan Bank Trust is currently generating about -0.15 per unit of volatility. If you would invest 7,630 in Metropolitan Bank Trust on November 3, 2024 and sell it today you would lose (700.00) from holding Metropolitan Bank Trust or give up 9.17% 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. Metropolitan Bank Trust
Performance |
| Timeline |
| BDO Unibank |
| Metropolitan Bank Trust |
BDO Unibank and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and Metropolitan Bank
The main advantage of trading using opposite BDO Unibank and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| BDO Unibank vs. Concepcion Industrial Corp | BDO Unibank vs. House of Investments | BDO Unibank vs. Atlas Consolidated Mining | BDO Unibank vs. Philippine Savings Bank |
| Metropolitan Bank vs. Apex Mining Co | Metropolitan Bank vs. SM Investments Corp | Metropolitan Bank vs. Semirara Mining Corp | Metropolitan Bank 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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