Correlation Between DMCI Holdings and Shanghai Industrial
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and Shanghai Industrial 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 Shanghai Industrial 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 Shanghai Industrial Holdings, you can compare the effects of market volatilities on DMCI Holdings and Shanghai Industrial 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 Shanghai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and Shanghai Industrial.
Diversification Opportunities for DMCI Holdings and Shanghai Industrial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DMCI and Shanghai is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings ADR and Shanghai Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Industrial 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 Shanghai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Industrial has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and Shanghai Industrial go up and down completely randomly.
Pair Corralation between DMCI Holdings and Shanghai Industrial
If you would invest 115.00 in Shanghai Industrial Holdings on September 20, 2024 and sell it today you would earn a total of 0.00 from holding Shanghai Industrial Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DMCI Holdings ADR vs. Shanghai Industrial Holdings
Performance |
| Timeline |
| DMCI Holdings ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shanghai Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DMCI Holdings and Shanghai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and Shanghai Industrial
The main advantage of trading using opposite DMCI Holdings and Shanghai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, Shanghai Industrial 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 Shanghai Industrial will offset losses from the drop in Shanghai Industrial's long position.| DMCI Holdings vs. San Miguel | DMCI Holdings vs. Ayala | DMCI Holdings vs. Teijin | DMCI Holdings vs. Alliance Global Group |
| Shanghai Industrial vs. Teijin | Shanghai Industrial vs. Ayala Corp ADR | Shanghai Industrial vs. CK Hutchison Holdings | Shanghai Industrial vs. 1847 Holdings LLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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