Correlation Between Concepcion Industrial and Dito CME
Can any of the company-specific risk be diversified away by investing in both Concepcion Industrial and Dito CME 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 Dito CME 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 Dito CME Holdings, you can compare the effects of market volatilities on Concepcion Industrial and Dito CME 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 Dito CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and Dito CME.
Diversification Opportunities for Concepcion Industrial and Dito CME
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Concepcion and Dito is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and Dito CME Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dito CME Holdings 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 Dito CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dito CME Holdings has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and Dito CME go up and down completely randomly.
Pair Corralation between Concepcion Industrial and Dito CME
Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 0.29 times more return on investment than Dito CME. However, Concepcion Industrial Corp is 3.48 times less risky than Dito CME. It trades about -0.08 of its potential returns per unit of risk. Dito CME Holdings is currently generating about -0.15 per unit of risk. If you would invest 1,400 in Concepcion Industrial Corp on September 1, 2024 and sell it today you would lose (50.00) from holding Concepcion Industrial Corp or give up 3.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Concepcion Industrial Corp vs. Dito CME Holdings
Performance |
| Timeline |
| Concepcion Industrial |
| Dito CME Holdings |
Concepcion Industrial and Dito CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concepcion Industrial and Dito CME
The main advantage of trading using opposite Concepcion Industrial and Dito CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial position performs unexpectedly, Dito CME 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 Dito CME will offset losses from the drop in Dito CME's long position.| Concepcion Industrial vs. GT Capital Holdings | Concepcion Industrial vs. Allhome Corp | Concepcion Industrial vs. Jollibee Foods Corp | Concepcion Industrial vs. LFM Properties Corp |
| Dito CME vs. Metro Retail Stores | Dito CME vs. East West Banking | Dito CME vs. SM Investments Corp | Dito CME vs. Transpacific Broadband 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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