Correlation Between Converge Information and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Converge Information 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 Converge Information and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and BDO Unibank, you can compare the effects of market volatilities on Converge Information 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 Converge Information with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and BDO Unibank.
Diversification Opportunities for Converge Information and BDO Unibank
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Converge and BDO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Converge Information 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 Converge Information Communications 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 Converge Information i.e., Converge Information and BDO Unibank go up and down completely randomly.
Pair Corralation between Converge Information and BDO Unibank
Assuming the 90 days trading horizon Converge Information Communications is expected to under-perform the BDO Unibank. In addition to that, Converge Information is 1.04 times more volatile than BDO Unibank. It trades about -0.01 of its total potential returns per unit of risk. BDO Unibank is currently generating about 0.09 per unit of volatility. If you would invest 13,900 in BDO Unibank on November 28, 2024 and sell it today you would earn a total of 550.00 from holding BDO Unibank or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Information Communica vs. BDO Unibank
Performance |
| Timeline |
| Converge Information |
| BDO Unibank |
Converge Information and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and BDO Unibank
The main advantage of trading using opposite Converge Information and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information 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.| Converge Information vs. Jollibee Foods Corp | Converge Information vs. Cebu Air Preferred | Converge Information vs. Semirara Mining Corp | Converge Information vs. Apex Mining Co |
| BDO Unibank vs. Figaro Coffee Group | BDO Unibank vs. Asia United Bank | BDO Unibank vs. Allhome Corp | BDO Unibank vs. Metro Retail Stores |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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