Correlation Between Figaro Coffee and Rizal Commercial
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee 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 Figaro Coffee and Rizal Commercial 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 Rizal Commercial Banking, you can compare the effects of market volatilities on Figaro Coffee 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 Figaro Coffee with a short position of Rizal Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Rizal Commercial.
Diversification Opportunities for Figaro Coffee and Rizal Commercial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Figaro and Rizal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee Group 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 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 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 Figaro Coffee i.e., Figaro Coffee and Rizal Commercial go up and down completely randomly.
Pair Corralation between Figaro Coffee and Rizal Commercial
Assuming the 90 days trading horizon Figaro Coffee Group is expected to generate 1.03 times more return on investment than Rizal Commercial. However, Figaro Coffee is 1.03 times more volatile than Rizal Commercial Banking. It trades about -0.11 of its potential returns per unit of risk. Rizal Commercial Banking is currently generating about -0.19 per unit of risk. If you would invest 88.00 in Figaro Coffee Group on August 28, 2024 and sell it today you would lose (5.00) from holding Figaro Coffee Group or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Figaro Coffee Group vs. Rizal Commercial Banking
Performance |
| Timeline |
| Figaro Coffee Group |
| Rizal Commercial Banking |
Figaro Coffee and Rizal Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and Rizal Commercial
The main advantage of trading using opposite Figaro Coffee and Rizal Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee 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.| Figaro Coffee vs. SM Investments Corp | Figaro Coffee vs. Suntrust Home Developers | Figaro Coffee vs. Allhome Corp | Figaro Coffee vs. Converge Information Communications |
| Rizal Commercial vs. Top Frontier Investment | Rizal Commercial vs. Philippine Savings Bank | Rizal Commercial vs. Security Bank Corp | Rizal Commercial vs. Sun Life Financial |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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