Correlation Between BDO Unibank and First Hawaiian
Can any of the company-specific risk be diversified away by investing in both BDO Unibank and First Hawaiian 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 First Hawaiian 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 First Hawaiian, you can compare the effects of market volatilities on BDO Unibank and First Hawaiian 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 First Hawaiian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and First Hawaiian.
Diversification Opportunities for BDO Unibank and First Hawaiian
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BDO and First is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank ADR and First Hawaiian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Hawaiian 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 First Hawaiian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Hawaiian has no effect on the direction of BDO Unibank i.e., BDO Unibank and First Hawaiian go up and down completely randomly.
Pair Corralation between BDO Unibank and First Hawaiian
Assuming the 90 days horizon BDO Unibank is expected to generate 1.38 times less return on investment than First Hawaiian. In addition to that, BDO Unibank is 1.18 times more volatile than First Hawaiian. It trades about 0.05 of its total potential returns per unit of risk. First Hawaiian is currently generating about 0.08 per unit of volatility. If you would invest 2,016 in First Hawaiian on September 4, 2024 and sell it today you would earn a total of 690.00 from holding First Hawaiian or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BDO Unibank ADR vs. First Hawaiian
Performance |
| Timeline |
| BDO Unibank ADR |
| First Hawaiian |
BDO Unibank and First Hawaiian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BDO Unibank and First Hawaiian
The main advantage of trading using opposite BDO Unibank and First Hawaiian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BDO Unibank position performs unexpectedly, First Hawaiian 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 First Hawaiian will offset losses from the drop in First Hawaiian's long position.| BDO Unibank vs. First Hawaiian | BDO Unibank vs. Central Pacific Financial | BDO Unibank vs. Territorial Bancorp | BDO Unibank vs. Comerica |
| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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