Correlation Between Cebu Air and Atlas Consolidated
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Atlas Consolidated 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 Cebu Air and Atlas Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air and Atlas Consolidated Mining, you can compare the effects of market volatilities on Cebu Air and Atlas Consolidated 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 Cebu Air with a short position of Atlas Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Atlas Consolidated.
Diversification Opportunities for Cebu Air and Atlas Consolidated
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cebu and Atlas is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining and Cebu Air 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 Cebu Air are associated (or correlated) with Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of Cebu Air i.e., Cebu Air and Atlas Consolidated go up and down completely randomly.
Pair Corralation between Cebu Air and Atlas Consolidated
Assuming the 90 days trading horizon Cebu Air is expected to generate 1.0 times more return on investment than Atlas Consolidated. However, Cebu Air is 1.0 times less risky than Atlas Consolidated. It trades about -0.26 of its potential returns per unit of risk. Atlas Consolidated Mining is currently generating about -0.29 per unit of risk. If you would invest 3,380 in Cebu Air on August 24, 2024 and sell it today you would lose (385.00) from holding Cebu Air or give up 11.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cebu Air vs. Atlas Consolidated Mining
Performance |
| Timeline |
| Cebu Air |
| Atlas Consolidated Mining |
Cebu Air and Atlas Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Atlas Consolidated
The main advantage of trading using opposite Cebu Air and Atlas Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Atlas Consolidated 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 Atlas Consolidated will offset losses from the drop in Atlas Consolidated's long position.| Cebu Air vs. SM Investments Corp | Cebu Air vs. Robinsons Retail Holdings | Cebu Air vs. Alliance Select Foods | Cebu Air vs. Philippine Business Bank |
| Atlas Consolidated vs. Prime Media Holdings | Atlas Consolidated vs. Alliance Select Foods | Atlas Consolidated vs. COL Financial Group | Atlas Consolidated vs. Union Bank of |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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