Correlation Between Globe Telecom and Cirtek Holdings
Can any of the company-specific risk be diversified away by investing in both Globe Telecom and Cirtek 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 Globe Telecom and Cirtek Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Telecom and Cirtek Holdings Philippines, you can compare the effects of market volatilities on Globe Telecom and Cirtek 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 Globe Telecom with a short position of Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Telecom and Cirtek Holdings.
Diversification Opportunities for Globe Telecom and Cirtek Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Globe and Cirtek is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Globe Telecom and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil 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 Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Globe Telecom i.e., Globe Telecom and Cirtek Holdings go up and down completely randomly.
Pair Corralation between Globe Telecom and Cirtek Holdings
Assuming the 90 days trading horizon Globe Telecom is expected to generate 1.13 times more return on investment than Cirtek Holdings. However, Globe Telecom is 1.13 times more volatile than Cirtek Holdings Philippines. It trades about 0.02 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.01 per unit of risk. If you would invest 194,549 in Globe Telecom on August 29, 2024 and sell it today you would earn a total of 15,451 from holding Globe Telecom or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 64.17% |
| Values | Daily Returns |
Globe Telecom vs. Cirtek Holdings Philippines
Performance |
| Timeline |
| Globe Telecom |
| Cirtek Holdings Phil |
Globe Telecom and Cirtek Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Telecom and Cirtek Holdings
The main advantage of trading using opposite Globe Telecom and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Telecom position performs unexpectedly, Cirtek 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 Cirtek Holdings will offset losses from the drop in Cirtek Holdings' long position.| Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp | Globe Telecom vs. PXP Energy Corp |
| Cirtek Holdings vs. Semirara Mining Corp | Cirtek Holdings vs. Atlas Consolidated Mining | Cirtek Holdings vs. Jollibee Foods Corp | Cirtek Holdings vs. Metro Retail Stores |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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