Correlation Between Commercial International and Bank of the Philippine Is
Can any of the company-specific risk be diversified away by investing in both Commercial International and Bank of the Philippine Is 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 Commercial International and Bank of the Philippine Is into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank and Bank of the, you can compare the effects of market volatilities on Commercial International and Bank of the Philippine Is 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 Commercial International with a short position of Bank of the Philippine Is. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and Bank of the Philippine Is.
Diversification Opportunities for Commercial International and Bank of the Philippine Is
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Commercial and Bank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the Philippine Is and Commercial International 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 Commercial International Bank are associated (or correlated) with Bank of the Philippine Is. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the Philippine Is has no effect on the direction of Commercial International i.e., Commercial International and Bank of the Philippine Is go up and down completely randomly.
Pair Corralation between Commercial International and Bank of the Philippine Is
Assuming the 90 days horizon Commercial International Bank is expected to generate 1.16 times more return on investment than Bank of the Philippine Is. However, Commercial International is 1.16 times more volatile than Bank of the. It trades about 0.04 of its potential returns per unit of risk. Bank of the is currently generating about 0.04 per unit of risk. If you would invest 116.00 in Commercial International Bank on August 31, 2024 and sell it today you would earn a total of 36.00 from holding Commercial International Bank or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.69% |
| Values | Daily Returns |
Commercial International Bank vs. Bank of the
Performance |
| Timeline |
| Commercial International |
| Bank of the Philippine Is |
Commercial International and Bank of the Philippine Is Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and Bank of the Philippine Is
The main advantage of trading using opposite Commercial International and Bank of the Philippine Is positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, Bank of the Philippine Is 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 Bank of the Philippine Is will offset losses from the drop in Bank of the Philippine Is' long position.| Commercial International vs. Bank Mandiri Persero | Commercial International vs. Turkiye Garanti Bankasi | Commercial International vs. BOC Hong Kong | Commercial International vs. Hang Seng Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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