Correlation Between Cebu Air and Granite Real
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Granite Real 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 Granite Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Granite Real Estate, you can compare the effects of market volatilities on Cebu Air and Granite Real 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 Granite Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Granite Real.
Diversification Opportunities for Cebu Air and Granite Real
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cebu and Granite is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Granite Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Real Estate 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 ADR are associated (or correlated) with Granite Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Real Estate has no effect on the direction of Cebu Air i.e., Cebu Air and Granite Real go up and down completely randomly.
Pair Corralation between Cebu Air and Granite Real
If you would invest 185.00 in Cebu Air ADR on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Cebu Air ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Cebu Air ADR vs. Granite Real Estate
Performance |
| Timeline |
| Cebu Air ADR |
| Granite Real Estate |
Cebu Air and Granite Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Granite Real
The main advantage of trading using opposite Cebu Air and Granite Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Granite Real 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 Granite Real will offset losses from the drop in Granite Real's long position.The idea behind Cebu Air ADR and Granite Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Granite Real vs. NewtekOne, 800 percent | Granite Real vs. Newtek Business Services | Granite Real vs. B Riley Financial | Granite Real vs. Seneca Foods Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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