Correlation Between First Abacus and Rizal Commercial
Can any of the company-specific risk be diversified away by investing in both First Abacus and Rizal Commercial 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 First Abacus and Rizal Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Abacus Financial and Rizal Commercial Banking, you can compare the effects of market volatilities on First Abacus and Rizal Commercial 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 First Abacus with a short position of Rizal Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Rizal Commercial.
Diversification Opportunities for First Abacus and Rizal Commercial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Rizal is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Rizal Commercial Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rizal Commercial Banking and First Abacus 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 First Abacus Financial are associated (or correlated) with Rizal Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rizal Commercial Banking has no effect on the direction of First Abacus i.e., First Abacus and Rizal Commercial go up and down completely randomly.
Pair Corralation between First Abacus and Rizal Commercial
Assuming the 90 days trading horizon First Abacus Financial is expected to generate 3.2 times more return on investment than Rizal Commercial. However, First Abacus is 3.2 times more volatile than Rizal Commercial Banking. It trades about 0.06 of its potential returns per unit of risk. Rizal Commercial Banking is currently generating about 0.02 per unit of risk. If you would invest 62.00 in First Abacus Financial on August 31, 2024 and sell it today you would earn a total of 7.00 from holding First Abacus Financial or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 18.04% |
| Values | Daily Returns |
First Abacus Financial vs. Rizal Commercial Banking
Performance |
| Timeline |
| First Abacus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Rizal Commercial Banking |
First Abacus and Rizal Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Abacus and Rizal Commercial
The main advantage of trading using opposite First Abacus and Rizal Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Abacus position performs unexpectedly, Rizal Commercial 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 Rizal Commercial will offset losses from the drop in Rizal Commercial's long position.| First Abacus vs. Converge Information Communications | First Abacus vs. Lepanto Consolidated Mining | First Abacus vs. Metro Retail Stores | First Abacus vs. Apex Mining Co |
| Rizal Commercial vs. Bank of the | Rizal Commercial vs. Bank of Commerce | Rizal Commercial vs. GT Capital Holdings | Rizal Commercial vs. Allhome 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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