Correlation Between Globe Telecom and Crown Asia
Can any of the company-specific risk be diversified away by investing in both Globe Telecom and Crown Asia 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 Crown Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Crown Asia Chemicals, you can compare the effects of market volatilities on Globe Telecom and Crown Asia 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 Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Crown Asia.
Diversification Opportunities for Globe Telecom and Crown Asia
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globe and Crown is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals 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 Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Globe Telecom i.e., Globe Telecom and Crown Asia go up and down completely randomly.
Pair Corralation between Globe Telecom and Crown Asia
Assuming the 90 days trading horizon Globe Telecom is expected to generate 0.71 times more return on investment than Crown Asia. However, Globe Telecom is 1.4 times less risky than Crown Asia. It trades about 0.09 of its potential returns per unit of risk. Crown Asia Chemicals is currently generating about 0.04 per unit of risk. If you would invest 166,028 in Globe Telecom on August 27, 2024 and sell it today you would earn a total of 43,972 from holding Globe Telecom or generate 26.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.45% |
| Values | Daily Returns |
Globe Telecom vs. Crown Asia Chemicals
Performance |
| Timeline |
| Globe Telecom |
| Crown Asia Chemicals |
Globe Telecom and Crown Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Crown Asia
The main advantage of trading using opposite Globe Telecom and Crown Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom position performs unexpectedly, Crown Asia 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 Crown Asia will offset losses from the drop in Crown Asia's long position.| Globe Telecom vs. Converge Information Communications | Globe Telecom vs. Atlas Consolidated Mining | Globe Telecom vs. Concepcion Industrial Corp | Globe Telecom vs. Transpacific Broadband Group |
| Crown Asia vs. Century Pacific Food | Crown Asia vs. Philex Mining Corp | Crown Asia vs. Converge Information Communications | Crown Asia vs. Apex Mining Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |