Correlation Between Concepcion Industrial and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial 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 Concepcion Industrial and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concepcion Industrial Corp and BDO Unibank, you can compare the effects of market volatilities on Concepcion Industrial 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 Concepcion Industrial with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and BDO Unibank.
Diversification Opportunities for Concepcion Industrial and BDO Unibank
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Concepcion and BDO is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Concepcion Industrial 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 Concepcion Industrial Corp 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 has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and BDO Unibank go up and down completely randomly.
Pair Corralation between Concepcion Industrial and BDO Unibank
Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 1.51 times more return on investment than BDO Unibank. However, Concepcion Industrial is 1.51 times more volatile than BDO Unibank. It trades about 0.03 of its potential returns per unit of risk. BDO Unibank is currently generating about 0.04 per unit of risk. If you would invest 1,113 in Concepcion Industrial Corp on December 7, 2024 and sell it today you would earn a total of 267.00 from holding Concepcion Industrial Corp or generate 23.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.29% |
| Values | Daily Returns |
Concepcion Industrial Corp vs. BDO Unibank
Performance |
| Timeline |
| Concepcion Industrial |
| BDO Unibank |
Concepcion Industrial and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concepcion Industrial and BDO Unibank
The main advantage of trading using opposite Concepcion Industrial and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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.| Concepcion Industrial vs. Integrated Micro Electronics | ||
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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