Correlation Between Crown Asia and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both Crown Asia and Benguet Corp 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 Crown Asia and Benguet Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Asia Chemicals and Benguet Corp A, you can compare the effects of market volatilities on Crown Asia and Benguet Corp 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 Crown Asia with a short position of Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Asia and Benguet Corp.
Diversification Opportunities for Crown Asia and Benguet Corp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crown and Benguet is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Crown Asia Chemicals and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and Crown Asia 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 Crown Asia Chemicals are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Crown Asia i.e., Crown Asia and Benguet Corp go up and down completely randomly.
Pair Corralation between Crown Asia and Benguet Corp
Assuming the 90 days trading horizon Crown Asia Chemicals is expected to under-perform the Benguet Corp. But the stock apears to be less risky and, when comparing its historical volatility, Crown Asia Chemicals is 2.0 times less risky than Benguet Corp. The stock trades about -0.12 of its potential returns per unit of risk. The Benguet Corp A is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 375.00 in Benguet Corp A on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Benguet Corp A or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Crown Asia Chemicals vs. Benguet Corp A
Performance |
| Timeline |
| Crown Asia Chemicals |
| Benguet Corp A |
Crown Asia and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Asia and Benguet Corp
The main advantage of trading using opposite Crown Asia and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Asia position performs unexpectedly, Benguet Corp 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| Crown Asia vs. Philippine Savings Bank | Crown Asia vs. Jollibee Foods Corp | Crown Asia vs. Prime Media Holdings | Crown Asia vs. Pacificonline Systems |
| Benguet Corp vs. Bank of the | Benguet Corp vs. Philex Mining Corp | Benguet Corp vs. Robinsons Retail Holdings | Benguet Corp vs. Philippine Business Bank |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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