Correlation Between Integrated Micro and Aboitiz Equity
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and Aboitiz Equity 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 Integrated Micro and Aboitiz Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Micro Electronics and Aboitiz Equity Ventures, you can compare the effects of market volatilities on Integrated Micro and Aboitiz Equity 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 Integrated Micro with a short position of Aboitiz Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and Aboitiz Equity.
Diversification Opportunities for Integrated Micro and Aboitiz Equity
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integrated and Aboitiz is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and Aboitiz Equity Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Equity Ventures and Integrated Micro 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 Integrated Micro Electronics are associated (or correlated) with Aboitiz Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Equity Ventures has no effect on the direction of Integrated Micro i.e., Integrated Micro and Aboitiz Equity go up and down completely randomly.
Pair Corralation between Integrated Micro and Aboitiz Equity
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the Aboitiz Equity. In addition to that, Integrated Micro is 1.02 times more volatile than Aboitiz Equity Ventures. It trades about -0.05 of its total potential returns per unit of risk. Aboitiz Equity Ventures is currently generating about -0.05 per unit of volatility. If you would invest 3,520 in Aboitiz Equity Ventures on September 3, 2024 and sell it today you would lose (120.00) from holding Aboitiz Equity Ventures or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integrated Micro Electronics vs. Aboitiz Equity Ventures
Performance |
| Timeline |
| Integrated Micro Ele |
| Aboitiz Equity Ventures |
Integrated Micro and Aboitiz Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Micro and Aboitiz Equity
The main advantage of trading using opposite Integrated Micro and Aboitiz Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, Aboitiz Equity 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 Aboitiz Equity will offset losses from the drop in Aboitiz Equity's long position.| Integrated Micro vs. Metro Retail Stores | Integrated Micro vs. Crown Asia Chemicals | Integrated Micro vs. Philex Mining Corp | Integrated Micro vs. Globe Telecom |
| Aboitiz Equity vs. Crown Asia Chemicals | Aboitiz Equity vs. Integrated Micro Electronics | Aboitiz Equity vs. Philippine Savings Bank | Aboitiz Equity vs. Converge Information Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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