Correlation Between Century Pacific and Bright Kindle
Can any of the company-specific risk be diversified away by investing in both Century Pacific and Bright Kindle 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 Century Pacific and Bright Kindle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Pacific Food and Bright Kindle Resources, you can compare the effects of market volatilities on Century Pacific and Bright Kindle 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 Century Pacific with a short position of Bright Kindle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Pacific and Bright Kindle.
Diversification Opportunities for Century Pacific and Bright Kindle
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Century and Bright is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Century Pacific Food and Bright Kindle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Kindle Resources and Century Pacific 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 Century Pacific Food are associated (or correlated) with Bright Kindle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Kindle Resources has no effect on the direction of Century Pacific i.e., Century Pacific and Bright Kindle go up and down completely randomly.
Pair Corralation between Century Pacific and Bright Kindle
Assuming the 90 days trading horizon Century Pacific is expected to generate 1.06 times less return on investment than Bright Kindle. But when comparing it to its historical volatility, Century Pacific Food is 2.32 times less risky than Bright Kindle. It trades about 0.05 of its potential returns per unit of risk. Bright Kindle Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Bright Kindle Resources on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Bright Kindle Resources or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.19% |
| Values | Daily Returns |
Century Pacific Food vs. Bright Kindle Resources
Performance |
| Timeline |
| Century Pacific Food |
| Bright Kindle Resources |
Century Pacific and Bright Kindle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Pacific and Bright Kindle
The main advantage of trading using opposite Century Pacific and Bright Kindle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Pacific position performs unexpectedly, Bright Kindle 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 Bright Kindle will offset losses from the drop in Bright Kindle's long position.| Century Pacific vs. Suntrust Home Developers | Century Pacific vs. SM Investments Corp | Century Pacific vs. Apex Mining Co | Century Pacific vs. Transpacific Broadband Group |
| Bright Kindle vs. Robinsons Retail Holdings | Bright Kindle vs. Union Bank of | Bright Kindle vs. Converge Information Communications | Bright Kindle vs. Jollibee Foods Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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