Correlation Between DMCI Holdings and Metro Retail
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and Metro Retail 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 Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMCI Holdings and Metro Retail Stores, you can compare the effects of market volatilities on DMCI Holdings and Metro Retail 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 Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and Metro Retail.
Diversification Opportunities for DMCI Holdings and Metro Retail
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between DMCI and Metro is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores 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 Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and Metro Retail go up and down completely randomly.
Pair Corralation between DMCI Holdings and Metro Retail
Assuming the 90 days trading horizon DMCI Holdings is expected to under-perform the Metro Retail. In addition to that, DMCI Holdings is 1.1 times more volatile than Metro Retail Stores. It trades about -0.17 of its total potential returns per unit of risk. Metro Retail Stores is currently generating about 0.01 per unit of volatility. If you would invest 121.00 in Metro Retail Stores on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Metro Retail Stores or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
DMCI Holdings vs. Metro Retail Stores
Performance |
| Timeline |
| DMCI Holdings |
| Metro Retail Stores |
DMCI Holdings and Metro Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and Metro Retail
The main advantage of trading using opposite DMCI Holdings and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.| DMCI Holdings vs. SM Investments Corp | DMCI Holdings vs. Ayala Corp | DMCI Holdings vs. Alliance Global Group |
| Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp | Metro Retail vs. Altus Property Ventures |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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