Correlation Between Globe Telecom and Integrated Micro
Can any of the company-specific risk be diversified away by investing in both Globe Telecom and Integrated Micro 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 Integrated Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Integrated Micro Electronics, you can compare the effects of market volatilities on Globe Telecom and Integrated Micro 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 Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Integrated Micro.
Diversification Opportunities for Globe Telecom and Integrated Micro
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and Integrated is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Globe Telecom i.e., Globe Telecom and Integrated Micro go up and down completely randomly.
Pair Corralation between Globe Telecom and Integrated Micro
Assuming the 90 days trading horizon Globe Telecom is expected to under-perform the Integrated Micro. But the stock apears to be less risky and, when comparing its historical volatility, Globe Telecom is 1.42 times less risky than Integrated Micro. The stock trades about -0.03 of its potential returns per unit of risk. The Integrated Micro Electronics is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 172.00 in Integrated Micro Electronics on August 31, 2024 and sell it today you would lose (8.00) from holding Integrated Micro Electronics or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Telecom vs. Integrated Micro Electronics
Performance |
| Timeline |
| Globe Telecom |
| Integrated Micro Ele |
Globe Telecom and Integrated Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Integrated Micro
The main advantage of trading using opposite Globe Telecom and Integrated Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom position performs unexpectedly, Integrated Micro 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 Integrated Micro will offset losses from the drop in Integrated Micro's long position.| Globe Telecom vs. Prime Media Holdings | Globe Telecom vs. Concepcion Industrial Corp | Globe Telecom vs. STI Education Systems | Globe Telecom vs. Semirara Mining Corp |
| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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