Correlation Between Fosun International and DMCI Holdings
Can any of the company-specific risk be diversified away by investing in both Fosun International and DMCI Holdings 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 Fosun International and DMCI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fosun International and DMCI Holdings ADR, you can compare the effects of market volatilities on Fosun International and DMCI Holdings 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 Fosun International with a short position of DMCI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fosun International and DMCI Holdings.
Diversification Opportunities for Fosun International and DMCI Holdings
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fosun and DMCI is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fosun International and DMCI Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMCI Holdings ADR and Fosun International 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 Fosun International are associated (or correlated) with DMCI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMCI Holdings ADR has no effect on the direction of Fosun International i.e., Fosun International and DMCI Holdings go up and down completely randomly.
Pair Corralation between Fosun International and DMCI Holdings
Assuming the 90 days horizon Fosun International is expected to under-perform the DMCI Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Fosun International is 1.05 times less risky than DMCI Holdings. The pink sheet trades about 0.0 of its potential returns per unit of risk. The DMCI Holdings ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 154.00 in DMCI Holdings ADR on September 3, 2024 and sell it today you would earn a total of 56.00 from holding DMCI Holdings ADR or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.86% |
| Values | Daily Returns |
Fosun International vs. DMCI Holdings ADR
Performance |
| Timeline |
| Fosun International |
| DMCI Holdings ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fosun International and DMCI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fosun International and DMCI Holdings
The main advantage of trading using opposite Fosun International and DMCI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fosun International position performs unexpectedly, DMCI Holdings 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 DMCI Holdings will offset losses from the drop in DMCI Holdings' long position.| Fosun International vs. Grupo Bimbo SAB | Fosun International vs. Grupo Financiero Inbursa | Fosun International vs. Becle SA de | Fosun International vs. HUMANA INC |
| DMCI Holdings vs. San Miguel | DMCI Holdings vs. Ayala | DMCI Holdings vs. Teijin | DMCI Holdings vs. Alliance Global Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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