Correlation Between Broadway Financial and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Broadway Financial and BDO Unibank 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 Broadway Financial and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadway Financial and BDO Unibank ADR, you can compare the effects of market volatilities on Broadway Financial and BDO Unibank 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 Broadway Financial with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadway Financial and BDO Unibank.
Diversification Opportunities for Broadway Financial and BDO Unibank
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadway and BDO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Broadway Financial and BDO Unibank ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank ADR and Broadway Financial 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 Broadway Financial are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank ADR has no effect on the direction of Broadway Financial i.e., Broadway Financial and BDO Unibank go up and down completely randomly.
Pair Corralation between Broadway Financial and BDO Unibank
Given the investment horizon of 90 days Broadway Financial is expected to generate 1.19 times more return on investment than BDO Unibank. However, Broadway Financial is 1.19 times more volatile than BDO Unibank ADR. It trades about 0.15 of its potential returns per unit of risk. BDO Unibank ADR is currently generating about -0.17 per unit of risk. If you would invest 661.00 in Broadway Financial on August 28, 2024 and sell it today you would earn a total of 60.00 from holding Broadway Financial or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadway Financial vs. BDO Unibank ADR
Performance |
| Timeline |
| Broadway Financial |
| BDO Unibank ADR |
Broadway Financial and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadway Financial and BDO Unibank
The main advantage of trading using opposite Broadway Financial and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadway Financial position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.| Broadway Financial vs. Community West Bancshares | Broadway Financial vs. First Northwest Bancorp | Broadway Financial vs. First Financial Northwest | Broadway Financial vs. First Capital |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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