Correlation Between DMCI Holdings and Teijin
Can any of the company-specific risk be diversified away by investing in both DMCI Holdings and Teijin 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 Teijin 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 Teijin, you can compare the effects of market volatilities on DMCI Holdings and Teijin 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 Teijin. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMCI Holdings and Teijin.
Diversification Opportunities for DMCI Holdings and Teijin
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between DMCI and Teijin is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding DMCI Holdings ADR and Teijin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teijin 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 Teijin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teijin has no effect on the direction of DMCI Holdings i.e., DMCI Holdings and Teijin go up and down completely randomly.
Pair Corralation between DMCI Holdings and Teijin
Assuming the 90 days horizon DMCI Holdings ADR is expected to generate 1.74 times more return on investment than Teijin. However, DMCI Holdings is 1.74 times more volatile than Teijin. It trades about 0.02 of its potential returns per unit of risk. Teijin is currently generating about 0.0 per unit of risk. If you would invest 221.00 in DMCI Holdings ADR on August 27, 2024 and sell it today you would lose (11.00) from holding DMCI Holdings ADR or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.4% |
| Values | Daily Returns |
DMCI Holdings ADR vs. Teijin
Performance |
| Timeline |
| DMCI Holdings ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Teijin |
DMCI Holdings and Teijin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMCI Holdings and Teijin
The main advantage of trading using opposite DMCI Holdings and Teijin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMCI Holdings position performs unexpectedly, Teijin 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 Teijin will offset losses from the drop in Teijin's long position.| DMCI Holdings vs. San Miguel | DMCI Holdings vs. Ayala | DMCI Holdings vs. Teijin | DMCI Holdings vs. Alliance Global Group |
| Teijin vs. Toray Industries ADR | Teijin vs. Nitto Denko Corp | Teijin vs. NSK Ltd ADR | Teijin vs. Secom Co Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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