Correlation Between First Hawaiian and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both First Hawaiian and BDO Unibank 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 Hawaiian and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hawaiian and BDO Unibank ADR, you can compare the effects of market volatilities on First Hawaiian and BDO Unibank 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 Hawaiian with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hawaiian and BDO Unibank.
Diversification Opportunities for First Hawaiian and BDO Unibank
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and BDO is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding First Hawaiian and BDO Unibank ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank ADR and First Hawaiian 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 Hawaiian are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank ADR has no effect on the direction of First Hawaiian i.e., First Hawaiian and BDO Unibank go up and down completely randomly.
Pair Corralation between First Hawaiian and BDO Unibank
Considering the 90-day investment horizon First Hawaiian is expected to generate 0.85 times more return on investment than BDO Unibank. However, First Hawaiian is 1.18 times less risky than BDO Unibank. It trades about 0.08 of its potential returns per unit of risk. BDO Unibank ADR is currently generating about 0.05 per unit of risk. If you would invest 2,016 in First Hawaiian on September 5, 2024 and sell it today you would earn a total of 690.00 from holding First Hawaiian or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hawaiian vs. BDO Unibank ADR
Performance |
| Timeline |
| First Hawaiian |
| BDO Unibank ADR |
First Hawaiian and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hawaiian and BDO Unibank
The main advantage of trading using opposite First Hawaiian and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hawaiian position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.| First Hawaiian vs. Territorial Bancorp | First Hawaiian vs. Bank of Hawaii | First Hawaiian vs. Financial Institutions | First Hawaiian vs. Heritage Financial |
| BDO Unibank vs. Swedbank AB | BDO Unibank vs. United Overseas Bank | BDO Unibank vs. KBC Groep NV | BDO Unibank vs. Jyske Bank AS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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