Correlation Between Globe Telecom and Cosco Capital
Can any of the company-specific risk be diversified away by investing in both Globe Telecom and Cosco Capital 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 Globe Telecom and Cosco Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Cosco Capital, you can compare the effects of market volatilities on Globe Telecom and Cosco Capital 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 Globe Telecom with a short position of Cosco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Cosco Capital.
Diversification Opportunities for Globe Telecom and Cosco Capital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Cosco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Cosco Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosco Capital and Globe Telecom 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 Globe Telecom are associated (or correlated) with Cosco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosco Capital has no effect on the direction of Globe Telecom i.e., Globe Telecom and Cosco Capital go up and down completely randomly.
Pair Corralation between Globe Telecom and Cosco Capital
Assuming the 90 days trading horizon Globe Telecom is expected to generate 0.86 times more return on investment than Cosco Capital. However, Globe Telecom is 1.16 times less risky than Cosco Capital. It trades about 0.08 of its potential returns per unit of risk. Cosco Capital is currently generating about -0.05 per unit of risk. If you would invest 203,587 in Globe Telecom on September 14, 2024 and sell it today you would earn a total of 4,413 from holding Globe Telecom or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Telecom vs. Cosco Capital
Performance |
| Timeline |
| Globe Telecom |
| Cosco Capital |
Globe Telecom and Cosco Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Cosco Capital
The main advantage of trading using opposite Globe Telecom and Cosco Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom position performs unexpectedly, Cosco Capital 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 Cosco Capital will offset losses from the drop in Cosco Capital's long position.| Globe Telecom vs. COL Financial Group | Globe Telecom vs. Transpacific Broadband Group | Globe Telecom vs. National Reinsurance | Globe Telecom vs. SM Investments Corp |
| Cosco Capital vs. STI Education Systems | Cosco Capital vs. Century Pacific Food | Cosco Capital vs. Lepanto Consolidated Mining | Cosco Capital 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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