Correlation Between Bank of the and AC Energy
Can any of the company-specific risk be diversified away by investing in both Bank of the and AC Energy 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 and AC Energy 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 AC Energy Philippines, you can compare the effects of market volatilities on Bank of the and AC Energy 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 with a short position of AC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of the and AC Energy.
Diversification Opportunities for Bank of the and AC Energy
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and ACEN is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and AC Energy Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Energy Philippines and Bank of the 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 AC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Energy Philippines has no effect on the direction of Bank of the i.e., Bank of the and AC Energy go up and down completely randomly.
Pair Corralation between Bank of the and AC Energy
Assuming the 90 days trading horizon Bank of the is expected to generate 0.71 times more return on investment than AC Energy. However, Bank of the is 1.42 times less risky than AC Energy. It trades about 0.02 of its potential returns per unit of risk. AC Energy Philippines is currently generating about 0.01 per unit of risk. If you would invest 12,490 in Bank of the on September 3, 2024 and sell it today you would earn a total of 370.00 from holding Bank of the or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of the vs. AC Energy Philippines
Performance |
| Timeline |
| Bank of the |
| AC Energy Philippines |
Bank of the and AC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of the and AC Energy
The main advantage of trading using opposite Bank of the and AC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the position performs unexpectedly, AC Energy 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 AC Energy will offset losses from the drop in AC Energy's long position.| Bank of the vs. Rizal Commercial Banking | Bank of the vs. GT Capital Holdings | Bank of the vs. Allhome Corp | Bank of the vs. Jollibee Foods Corp |
| AC Energy vs. Manila Mining Corp | AC Energy vs. Bank of the | AC Energy vs. Transpacific Broadband Group | AC Energy vs. Rizal Commercial Banking |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |