Correlation Between Century Pacific and Converge Information
Can any of the company-specific risk be diversified away by investing in both Century Pacific and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Century Pacific and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Pacific and Converge Information.
Diversification Opportunities for Century Pacific and Converge Information
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Century and Converge is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Century Pacific Food and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Century Pacific i.e., Century Pacific and Converge Information go up and down completely randomly.
Pair Corralation between Century Pacific and Converge Information
Assuming the 90 days trading horizon Century Pacific is expected to generate 2.08 times less return on investment than Converge Information. But when comparing it to its historical volatility, Century Pacific Food is 1.18 times less risky than Converge Information. It trades about 0.07 of its potential returns per unit of risk. Converge Information Communications is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Converge Information Communications on August 29, 2024 and sell it today you would earn a total of 837.00 from holding Converge Information Communications or generate 101.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Pacific Food vs. Converge Information Communica
Performance |
| Timeline |
| Century Pacific Food |
| Converge Information |
Century Pacific and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Pacific and Converge Information
The main advantage of trading using opposite Century Pacific and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Pacific position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Century Pacific vs. Swift Foods | Century Pacific vs. Allhome Corp | Century Pacific vs. Jollibee Foods Corp | Century Pacific vs. LFM Properties Corp |
| Converge Information vs. Metro Retail Stores | Converge Information vs. Jollibee Foods Corp | Converge Information vs. Top Frontier Investment | Converge Information vs. Prime Media Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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