Correlation Between Cebu Air and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Cebu Air and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Sligro Food.
Diversification Opportunities for Cebu Air and Sligro Food
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cebu and Sligro is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Cebu Air i.e., Cebu Air and Sligro Food go up and down completely randomly.
Pair Corralation between Cebu Air and Sligro Food
Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the Sligro Food. In addition to that, Cebu Air is 1.1 times more volatile than Sligro Food Group. It trades about -0.1 of its total potential returns per unit of risk. Sligro Food Group is currently generating about -0.06 per unit of volatility. If you would invest 1,303 in Sligro Food Group on November 2, 2024 and sell it today you would lose (103.00) from holding Sligro Food Group or give up 7.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cebu Air ADR vs. Sligro Food Group
Performance |
| Timeline |
| Cebu Air ADR |
| Sligro Food Group |
Cebu Air and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Sligro Food
The main advantage of trading using opposite Cebu Air and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Cebu Air vs. Apogee Therapeutics, Common | Cebu Air vs. Fidus Investment Corp | Cebu Air vs. ioneer Ltd American | Cebu Air vs. Mangazeya Mining |
| Sligro Food vs. Wizz Air Holdings | Sligro Food vs. Alaska Air Group | Sligro Food vs. LATAM Airlines Group | Sligro Food vs. Mesa Air Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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