Correlation Between DMCI Holdings and Fosun International
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and Fosun International 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 Fosun International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DMCI Holdings ADR and Fosun International, you can compare the effects of market volatilities on DMCI Holdings and Fosun International 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 Fosun International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and Fosun International.
Diversification Opportunities for DMCI Holdings and Fosun International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between DMCI and Fosun is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings ADR and Fosun International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fosun International 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 ADR are associated (or correlated) with Fosun International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fosun International has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and Fosun International go up and down completely randomly.
Pair Corralation between DMCI Holdings and Fosun International
Assuming the 90 days horizon DMCI Holdings ADR is expected to under-perform the Fosun International. But the pink sheet apears to be less risky and, when comparing its historical volatility, DMCI Holdings ADR is 3.17 times less risky than Fosun International. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Fosun International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Fosun International on September 1, 2024 and sell it today you would lose (5.00) from holding Fosun International or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.14% |
| Values | Daily Returns |
DMCI Holdings ADR vs. Fosun International
Performance |
| Timeline |
| DMCI Holdings ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fosun International |
DMCI Holdings and Fosun International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and Fosun International
The main advantage of trading using opposite DMCI Holdings and Fosun International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, Fosun International 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 Fosun International will offset losses from the drop in Fosun International's long position.| DMCI Holdings vs. San Miguel | DMCI Holdings vs. Ayala | DMCI Holdings vs. Teijin | DMCI Holdings vs. Alliance Global Group |
| Fosun International vs. Global Tech Industries | Fosun International vs. NN Inc | Fosun International vs. National Health Scan | Fosun International vs. RCABS Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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