Correlation Between DMCI Holdings and East West
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and East West 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 DMCI Holdings and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMCI Holdings and East West Banking, you can compare the effects of market volatilities on DMCI Holdings and East West 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 DMCI Holdings with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and East West.
Diversification Opportunities for DMCI Holdings and East West
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between DMCI and East is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings and East West Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Banking and DMCI Holdings 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 DMCI Holdings are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Banking has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and East West go up and down completely randomly.
Pair Corralation between DMCI Holdings and East West
Assuming the 90 days trading horizon DMCI Holdings is expected to generate 1.38 times less return on investment than East West. In addition to that, DMCI Holdings is 1.49 times more volatile than East West Banking. It trades about 0.04 of its total potential returns per unit of risk. East West Banking is currently generating about 0.09 per unit of volatility. If you would invest 604.00 in East West Banking on September 5, 2024 and sell it today you would earn a total of 371.00 from holding East West Banking or generate 61.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DMCI Holdings vs. East West Banking
Performance |
| Timeline |
| DMCI Holdings |
| East West Banking |
DMCI Holdings and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and East West
The main advantage of trading using opposite DMCI Holdings and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| DMCI Holdings vs. East West Banking | DMCI Holdings vs. COL Financial Group | DMCI Holdings vs. Sun Life Financial | DMCI Holdings vs. Union Bank of |
| East West vs. Pacificonline Systems | East West vs. Integrated Micro Electronics | East West vs. Semirara Mining Corp | East West vs. SM Investments Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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