Correlation Between Allhome Corp and Megawide Construction
Can any of the company-specific risk be diversified away by investing in both Allhome Corp and Megawide Construction 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 Allhome Corp and Megawide Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and Megawide Construction Corp, you can compare the effects of market volatilities on Allhome Corp and Megawide Construction 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 Allhome Corp with a short position of Megawide Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and Megawide Construction.
Diversification Opportunities for Allhome Corp and Megawide Construction
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allhome and Megawide is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and Megawide Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megawide Construction and Allhome Corp 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 Allhome Corp are associated (or correlated) with Megawide Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megawide Construction has no effect on the direction of Allhome Corp i.e., Allhome Corp and Megawide Construction go up and down completely randomly.
Pair Corralation between Allhome Corp and Megawide Construction
Assuming the 90 days trading horizon Allhome Corp is expected to under-perform the Megawide Construction. In addition to that, Allhome Corp is 1.43 times more volatile than Megawide Construction Corp. It trades about -0.22 of its total potential returns per unit of risk. Megawide Construction Corp is currently generating about 0.05 per unit of volatility. If you would invest 9,740 in Megawide Construction Corp on October 20, 2024 and sell it today you would earn a total of 55.00 from holding Megawide Construction Corp or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 38.89% |
| Values | Daily Returns |
Allhome Corp vs. Megawide Construction Corp
Performance |
| Timeline |
| Allhome Corp |
| Megawide Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Allhome Corp and Megawide Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allhome Corp and Megawide Construction
The main advantage of trading using opposite Allhome Corp and Megawide Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp position performs unexpectedly, Megawide Construction 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 Megawide Construction will offset losses from the drop in Megawide Construction's long position.| Allhome Corp vs. Asia United Bank | Allhome Corp vs. Cebu Air Preferred | Allhome Corp vs. Rizal Commercial Banking | Allhome Corp vs. House of Investments |
| Megawide Construction vs. Atlas Consolidated Mining | Megawide Construction vs. Jollibee Foods Corp | Megawide Construction vs. Manila Mining Corp | Megawide Construction vs. Lepanto Consolidated Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |