Correlation Between COL Financial and DMCI Holdings
Can any of the company-specific risk be diversified away by investing in both COL Financial and DMCI Holdings 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 COL Financial and DMCI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and DMCI Holdings, you can compare the effects of market volatilities on COL Financial and DMCI Holdings 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 COL Financial with a short position of DMCI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and DMCI Holdings.
Diversification Opportunities for COL Financial and DMCI Holdings
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COL and DMCI is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group and DMCI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMCI Holdings and COL Financial 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 COL Financial Group are associated (or correlated) with DMCI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMCI Holdings has no effect on the direction of COL Financial i.e., COL Financial and DMCI Holdings go up and down completely randomly.
Pair Corralation between COL Financial and DMCI Holdings
Assuming the 90 days trading horizon COL Financial Group is expected to under-perform the DMCI Holdings. In addition to that, COL Financial is 1.16 times more volatile than DMCI Holdings. It trades about -0.05 of its total potential returns per unit of risk. DMCI Holdings is currently generating about 0.05 per unit of volatility. If you would invest 851.00 in DMCI Holdings on August 29, 2024 and sell it today you would earn a total of 201.00 from holding DMCI Holdings or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.38% |
| Values | Daily Returns |
COL Financial Group vs. DMCI Holdings
Performance |
| Timeline |
| COL Financial Group |
| DMCI Holdings |
COL Financial and DMCI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Financial and DMCI Holdings
The main advantage of trading using opposite COL Financial and DMCI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial position performs unexpectedly, DMCI Holdings 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 DMCI Holdings will offset losses from the drop in DMCI Holdings' long position.| COL Financial vs. VistaREIT | COL Financial vs. Bright Kindle Resources | COL Financial vs. Medco Holdings | COL Financial vs. Allhome Corp |
| DMCI Holdings vs. SM Investments Corp | DMCI Holdings vs. Ayala Corp | DMCI Holdings vs. Alliance Global 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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