Correlation Between East West and Bank of the
Can any of the company-specific risk be diversified away by investing in both East West and Bank of the 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 East West and Bank of the into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Banking and Bank of the, you can compare the effects of market volatilities on East West and Bank of the 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 East West with a short position of Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Bank of the.
Diversification Opportunities for East West and Bank of the
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between East and Bank is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and East West 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 East West Banking are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of East West i.e., East West and Bank of the go up and down completely randomly.
Pair Corralation between East West and Bank of the
Assuming the 90 days trading horizon East West Banking is expected to generate 0.46 times more return on investment than Bank of the. However, East West Banking is 2.18 times less risky than Bank of the. It trades about 0.16 of its potential returns per unit of risk. Bank of the is currently generating about -0.01 per unit of risk. If you would invest 970.00 in East West Banking on October 20, 2024 and sell it today you would earn a total of 17.00 from holding East West Banking or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Banking vs. Bank of the
Performance |
| Timeline |
| East West Banking |
| Bank of the |
East West and Bank of the Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Bank of the
The main advantage of trading using opposite East West and Bank of the positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Bank of the 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 Bank of the will offset losses from the drop in Bank of the's long position.| East West vs. Figaro Coffee Group | East West vs. Asia United Bank | East West vs. COL Financial Group | East West vs. Philippine Business Bank |
| Bank of the vs. Robinsons Retail Holdings | Bank of the vs. Apex Mining Co | Bank of the vs. Metro Retail Stores | Bank of the vs. Crown Asia Chemicals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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