Correlation Between DMCI Holdings and Manila Mining
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and Manila Mining 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 Manila Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMCI Holdings and Manila Mining Corp, you can compare the effects of market volatilities on DMCI Holdings and Manila Mining 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 Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and Manila Mining.
Diversification Opportunities for DMCI Holdings and Manila Mining
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DMCI and Manila is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and Manila Mining go up and down completely randomly.
Pair Corralation between DMCI Holdings and Manila Mining
Assuming the 90 days trading horizon DMCI Holdings is expected to generate 0.83 times more return on investment than Manila Mining. However, DMCI Holdings is 1.21 times less risky than Manila Mining. It trades about -0.13 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.66 per unit of risk. If you would invest 1,120 in DMCI Holdings on September 1, 2024 and sell it today you would lose (54.00) from holding DMCI Holdings or give up 4.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
DMCI Holdings vs. Manila Mining Corp
Performance |
| Timeline |
| DMCI Holdings |
| Manila Mining Corp |
DMCI Holdings and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and Manila Mining
The main advantage of trading using opposite DMCI Holdings and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, Manila Mining 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| DMCI Holdings vs. Manila Mining Corp | DMCI Holdings vs. Semirara Mining Corp | DMCI Holdings vs. Crown Asia Chemicals | DMCI Holdings vs. Lepanto Consolidated Mining |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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