Correlation Between East West and Philex Mining
Can any of the company-specific risk be diversified away by investing in both East West and Philex Mining 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 Philex Mining 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 Philex Mining Corp, you can compare the effects of market volatilities on East West and Philex Mining 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 Philex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Philex Mining.
Diversification Opportunities for East West and Philex Mining
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Philex is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding East West Banking and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining 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 Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of East West i.e., East West and Philex Mining go up and down completely randomly.
Pair Corralation between East West and Philex Mining
Assuming the 90 days trading horizon East West Banking is expected to generate 0.53 times more return on investment than Philex Mining. However, East West Banking is 1.88 times less risky than Philex Mining. It trades about 0.08 of its potential returns per unit of risk. Philex Mining Corp is currently generating about -0.01 per unit of risk. If you would invest 827.00 in East West Banking on August 28, 2024 and sell it today you would earn a total of 149.00 from holding East West Banking or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.51% |
| Values | Daily Returns |
East West Banking vs. Philex Mining Corp
Performance |
| Timeline |
| East West Banking |
| Philex Mining Corp |
East West and Philex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Philex Mining
The main advantage of trading using opposite East West and Philex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Philex Mining 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 Philex Mining will offset losses from the drop in Philex Mining's long position.| East West vs. Apex Mining Co | East West vs. Atlas Consolidated Mining | East West vs. Transpacific Broadband Group | East West vs. Philex Mining Corp |
| Philex Mining vs. Pacificonline Systems | Philex Mining vs. BDO Unibank | Philex Mining vs. Metropolitan Bank Trust | Philex Mining vs. Converge Information Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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