Correlation Between Bank of the Philippine Is and BOC Hong
Can any of the company-specific risk be diversified away by investing in both Bank of the Philippine Is and BOC Hong 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 Bank of the Philippine Is and BOC Hong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of the and BOC Hong Kong, you can compare the effects of market volatilities on Bank of the Philippine Is and BOC Hong 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 Bank of the Philippine Is with a short position of BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of the Philippine Is and BOC Hong.
Diversification Opportunities for Bank of the Philippine Is and BOC Hong
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and BOC is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong and Bank of the Philippine Is 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 Bank of the are associated (or correlated) with BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of Bank of the Philippine Is i.e., Bank of the Philippine Is and BOC Hong go up and down completely randomly.
Pair Corralation between Bank of the Philippine Is and BOC Hong
Assuming the 90 days horizon Bank of the is expected to under-perform the BOC Hong. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank of the is 1.2 times less risky than BOC Hong. The pink sheet trades about -0.22 of its potential returns per unit of risk. The BOC Hong Kong is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,340 in BOC Hong Kong on November 4, 2024 and sell it today you would earn a total of 205.00 from holding BOC Hong Kong or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of the vs. BOC Hong Kong
Performance |
| Timeline |
| Bank of the Philippine Is |
| BOC Hong Kong |
Bank of the Philippine Is and BOC Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of the Philippine Is and BOC Hong
The main advantage of trading using opposite Bank of the Philippine Is and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the Philippine Is position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.| Bank of the Philippine Is vs. BOC Hong Kong | Bank of the Philippine Is vs. China Merchants Bank | Bank of the Philippine Is vs. BDO Unibank ADR | Bank of the Philippine Is vs. United Security Bancshares |
| BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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