Correlation Between Cebu Landmasters and Metro Retail
Can any of the company-specific risk be diversified away by investing in both Cebu Landmasters and Metro Retail 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 Landmasters and Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Landmasters and Metro Retail Stores, you can compare the effects of market volatilities on Cebu Landmasters and Metro Retail 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 Landmasters with a short position of Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Landmasters and Metro Retail.
Diversification Opportunities for Cebu Landmasters and Metro Retail
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cebu and Metro is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Landmasters and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores and Cebu Landmasters 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 Landmasters are associated (or correlated) with Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of Cebu Landmasters i.e., Cebu Landmasters and Metro Retail go up and down completely randomly.
Pair Corralation between Cebu Landmasters and Metro Retail
Assuming the 90 days trading horizon Cebu Landmasters is expected to generate 0.71 times more return on investment than Metro Retail. However, Cebu Landmasters is 1.4 times less risky than Metro Retail. It trades about 0.06 of its potential returns per unit of risk. Metro Retail Stores is currently generating about 0.03 per unit of risk. If you would invest 233.00 in Cebu Landmasters on September 4, 2024 and sell it today you would earn a total of 42.00 from holding Cebu Landmasters or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.87% |
| Values | Daily Returns |
Cebu Landmasters vs. Metro Retail Stores
Performance |
| Timeline |
| Cebu Landmasters |
| Metro Retail Stores |
Cebu Landmasters and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Landmasters and Metro Retail
The main advantage of trading using opposite Cebu Landmasters and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Landmasters position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| Cebu Landmasters vs. Metro Retail Stores | Cebu Landmasters vs. SM Investments Corp | Cebu Landmasters vs. Bank of the | Cebu Landmasters vs. Transpacific Broadband Group |
| Metro Retail vs. Converge Information Communications | Metro Retail vs. Semirara Mining Corp | Metro Retail vs. Lepanto Consolidated Mining | Metro Retail vs. Globe Telecom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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