Correlation Between Crown Asia and Philippine Savings
Can any of the company-specific risk be diversified away by investing in both Crown Asia and Philippine Savings 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 Philippine Savings 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 Philippine Savings Bank, you can compare the effects of market volatilities on Crown Asia and Philippine Savings 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 Philippine Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Asia and Philippine Savings.
Diversification Opportunities for Crown Asia and Philippine Savings
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crown and Philippine is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Crown Asia Chemicals and Philippine Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippine Savings Bank 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 Philippine Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippine Savings Bank has no effect on the direction of Crown Asia i.e., Crown Asia and Philippine Savings go up and down completely randomly.
Pair Corralation between Crown Asia and Philippine Savings
Assuming the 90 days trading horizon Crown Asia Chemicals is expected to generate 1.16 times more return on investment than Philippine Savings. However, Crown Asia is 1.16 times more volatile than Philippine Savings Bank. It trades about 0.05 of its potential returns per unit of risk. Philippine Savings Bank is currently generating about 0.03 per unit of risk. If you would invest 149.00 in Crown Asia Chemicals on August 25, 2024 and sell it today you would earn a total of 29.00 from holding Crown Asia Chemicals or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.51% |
| Values | Daily Returns |
Crown Asia Chemicals vs. Philippine Savings Bank
Performance |
| Timeline |
| Crown Asia Chemicals |
| Philippine Savings Bank |
Crown Asia and Philippine Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Asia and Philippine Savings
The main advantage of trading using opposite Crown Asia and Philippine Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Asia position performs unexpectedly, Philippine Savings 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 Philippine Savings will offset losses from the drop in Philippine Savings' long position.| Crown Asia vs. Allhome Corp | Crown Asia vs. Jollibee Foods Corp | Crown Asia vs. LFM Properties Corp | Crown Asia vs. PXP Energy Corp |
| Philippine Savings vs. Philippine Business Bank | Philippine Savings vs. Crown Asia Chemicals | Philippine Savings vs. SM Investments Corp | Philippine Savings vs. Figaro Coffee 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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