Correlation Between Globe Telecom and Metropolitan Bank
Can any of the company-specific risk be diversified away by investing in both Globe Telecom and Metropolitan Bank 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 Metropolitan Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Metropolitan Bank Trust, you can compare the effects of market volatilities on Globe Telecom and Metropolitan Bank 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 Metropolitan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Metropolitan Bank.
Diversification Opportunities for Globe Telecom and Metropolitan Bank
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globe and Metropolitan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Metropolitan Bank Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Bank Trust 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 Metropolitan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Bank Trust has no effect on the direction of Globe Telecom i.e., Globe Telecom and Metropolitan Bank go up and down completely randomly.
Pair Corralation between Globe Telecom and Metropolitan Bank
Assuming the 90 days trading horizon Globe Telecom is expected to under-perform the Metropolitan Bank. But the stock apears to be less risky and, when comparing its historical volatility, Globe Telecom is 1.08 times less risky than Metropolitan Bank. The stock trades about -0.11 of its potential returns per unit of risk. The Metropolitan Bank Trust is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Metropolitan Bank Trust on August 25, 2024 and sell it today you would lose (50.00) from holding Metropolitan Bank Trust or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Globe Telecom vs. Metropolitan Bank Trust
Performance |
| Timeline |
| Globe Telecom |
| Metropolitan Bank Trust |
Globe Telecom and Metropolitan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Metropolitan Bank
The main advantage of trading using opposite Globe Telecom and Metropolitan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom position performs unexpectedly, Metropolitan Bank 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 Metropolitan Bank will offset losses from the drop in Metropolitan Bank's long position.| Globe Telecom vs. PLDT Inc | Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp |
| Metropolitan Bank vs. SM Investments Corp | Metropolitan Bank vs. Converge Information Communications | Metropolitan Bank vs. Union Bank of | Metropolitan Bank vs. Pacificonline Systems |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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