Correlation Between East West and Allhome Corp
Can any of the company-specific risk be diversified away by investing in both East West and Allhome Corp 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 Allhome Corp 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 Allhome Corp, you can compare the effects of market volatilities on East West and Allhome Corp 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 Allhome Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Allhome Corp.
Diversification Opportunities for East West and Allhome Corp
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between East and Allhome is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking and Allhome Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allhome Corp 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 Allhome Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allhome Corp has no effect on the direction of East West i.e., East West and Allhome Corp go up and down completely randomly.
Pair Corralation between East West and Allhome Corp
Assuming the 90 days trading horizon East West Banking is expected to generate 0.5 times more return on investment than Allhome Corp. However, East West Banking is 2.0 times less risky than Allhome Corp. It trades about 0.12 of its potential returns per unit of risk. Allhome Corp is currently generating about -0.03 per unit of risk. If you would invest 897.00 in East West Banking on September 12, 2024 and sell it today you would earn a total of 87.00 from holding East West Banking or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
East West Banking vs. Allhome Corp
Performance |
| Timeline |
| East West Banking |
| Allhome Corp |
East West and Allhome Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Allhome Corp
The main advantage of trading using opposite East West and Allhome Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Allhome Corp 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 Allhome Corp will offset losses from the drop in Allhome Corp's long position.| East West vs. BDO Unibank | East West vs. Metropolitan Bank Trust | East West vs. Security Bank Corp | East West vs. Union Bank of |
| Allhome Corp vs. GT Capital Holdings | Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp | Allhome Corp vs. Monde Nissin Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |