Correlation Between BDO Unibank and China Overseas
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and China Overseas 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 China Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BDO Unibank ADR and China Overseas Land, you can compare the effects of market volatilities on BDO Unibank and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and China Overseas.
Diversification Opportunities for BDO Unibank and China Overseas
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between BDO and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank ADR and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 ADR are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of BDO Unibank i.e., BDO Unibank and China Overseas go up and down completely randomly.
Pair Corralation between BDO Unibank and China Overseas
Assuming the 90 days horizon BDO Unibank ADR is expected to generate 0.61 times more return on investment than China Overseas. However, BDO Unibank ADR is 1.64 times less risky than China Overseas. It trades about 0.03 of its potential returns per unit of risk. China Overseas Land is currently generating about 0.01 per unit of risk. If you would invest 2,308 in BDO Unibank ADR on August 27, 2024 and sell it today you would earn a total of 224.00 from holding BDO Unibank ADR or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
BDO Unibank ADR vs. China Overseas Land
Performance |
| Timeline |
| BDO Unibank ADR |
| China Overseas Land |
BDO Unibank and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and China Overseas
The main advantage of trading using opposite BDO Unibank and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| BDO Unibank vs. PSB Holdings | BDO Unibank vs. United Overseas Bank | BDO Unibank vs. Turkiye Garanti Bankasi |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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