Correlation Between Figaro Coffee and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee and Cebu Air 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 Figaro Coffee and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figaro Coffee Group and Cebu Air, you can compare the effects of market volatilities on Figaro Coffee and Cebu Air 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 Figaro Coffee with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Cebu Air.
Diversification Opportunities for Figaro Coffee and Cebu Air
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Figaro and Cebu is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee Group and Cebu Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air and Figaro Coffee 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 Figaro Coffee Group are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air has no effect on the direction of Figaro Coffee i.e., Figaro Coffee and Cebu Air go up and down completely randomly.
Pair Corralation between Figaro Coffee and Cebu Air
Assuming the 90 days trading horizon Figaro Coffee Group is expected to generate 1.53 times more return on investment than Cebu Air. However, Figaro Coffee is 1.53 times more volatile than Cebu Air. It trades about 0.02 of its potential returns per unit of risk. Cebu Air is currently generating about -0.04 per unit of risk. If you would invest 75.00 in Figaro Coffee Group on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Figaro Coffee Group or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Figaro Coffee Group vs. Cebu Air
Performance |
| Timeline |
| Figaro Coffee Group |
| Cebu Air |
Figaro Coffee and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and Cebu Air
The main advantage of trading using opposite Figaro Coffee and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Berjaya Philippines | Figaro Coffee vs. Pacificonline Systems |
| Cebu Air vs. Cebu Air Preferred | Cebu Air vs. Allhome Corp | Cebu Air vs. LFM Properties Corp | Cebu Air vs. Altus Property Ventures |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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