Correlation Between Converge Information and Cebu Landmasters
Can any of the company-specific risk be diversified away by investing in both Converge Information and Cebu Landmasters 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 Cebu Landmasters 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 Cebu Landmasters, you can compare the effects of market volatilities on Converge Information and Cebu Landmasters 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 Cebu Landmasters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Cebu Landmasters.
Diversification Opportunities for Converge Information and Cebu Landmasters
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Converge and Cebu is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Cebu Landmasters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Landmasters 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 Cebu Landmasters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Landmasters has no effect on the direction of Converge Information i.e., Converge Information and Cebu Landmasters go up and down completely randomly.
Pair Corralation between Converge Information and Cebu Landmasters
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 1.23 times more return on investment than Cebu Landmasters. However, Converge Information is 1.23 times more volatile than Cebu Landmasters. It trades about 0.19 of its potential returns per unit of risk. Cebu Landmasters is currently generating about -0.11 per unit of risk. If you would invest 1,538 in Converge Information Communications on September 4, 2024 and sell it today you would earn a total of 130.00 from holding Converge Information Communications or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Information Communica vs. Cebu Landmasters
Performance |
| Timeline |
| Converge Information |
| Cebu Landmasters |
Converge Information and Cebu Landmasters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and Cebu Landmasters
The main advantage of trading using opposite Converge Information and Cebu Landmasters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, Cebu Landmasters 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 Cebu Landmasters will offset losses from the drop in Cebu Landmasters' long position.| Converge Information vs. Dito CME Holdings | Converge Information vs. Filinvest Land | Converge Information vs. Century Pacific Food |
| Cebu Landmasters vs. Metro Retail Stores | Cebu Landmasters vs. SM Investments Corp | Cebu Landmasters vs. Bank of the | Cebu Landmasters 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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