Correlation Between Alliance Select and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both Alliance Select and Benguet Corp 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 Alliance Select and Benguet Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Select Foods and Benguet Corp A, you can compare the effects of market volatilities on Alliance Select and Benguet Corp 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 Alliance Select with a short position of Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Select and Benguet Corp.
Diversification Opportunities for Alliance Select and Benguet Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and Benguet is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Select Foods and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and Alliance Select 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 Alliance Select Foods are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Alliance Select i.e., Alliance Select and Benguet Corp go up and down completely randomly.
Pair Corralation between Alliance Select and Benguet Corp
Assuming the 90 days trading horizon Alliance Select Foods is expected to under-perform the Benguet Corp. In addition to that, Alliance Select is 1.13 times more volatile than Benguet Corp A. It trades about -0.04 of its total potential returns per unit of risk. Benguet Corp A is currently generating about -0.01 per unit of volatility. If you would invest 380.00 in Benguet Corp A on November 3, 2024 and sell it today you would lose (35.00) from holding Benguet Corp A or give up 9.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.38% |
| Values | Daily Returns |
Alliance Select Foods vs. Benguet Corp A
Performance |
| Timeline |
| Alliance Select Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Benguet Corp A |
Alliance Select and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Select and Benguet Corp
The main advantage of trading using opposite Alliance Select and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Select position performs unexpectedly, Benguet Corp 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| Alliance Select vs. Metro Retail Stores | Alliance Select vs. Allhome Corp | Alliance Select vs. Philippine Savings Bank | Alliance Select vs. Converge Information Communications |
| Benguet Corp vs. Integrated Micro Electronics | Benguet Corp vs. House of Investments | Benguet Corp vs. Atlas Consolidated Mining | Benguet Corp vs. Globe Telecom |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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