Correlation Between Integrated Micro and THE PHILIPPINE
Can any of the company-specific risk be diversified away by investing in both Integrated Micro and THE PHILIPPINE 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 THE PHILIPPINE 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 THE PHILIPPINE STOCK, you can compare the effects of market volatilities on Integrated Micro and THE PHILIPPINE 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 THE PHILIPPINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Micro and THE PHILIPPINE.
Diversification Opportunities for Integrated Micro and THE PHILIPPINE
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Integrated and THE is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Micro Electronics and THE PHILIPPINE STOCK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THE PHILIPPINE STOCK 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 THE PHILIPPINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THE PHILIPPINE STOCK has no effect on the direction of Integrated Micro i.e., Integrated Micro and THE PHILIPPINE go up and down completely randomly.
Pair Corralation between Integrated Micro and THE PHILIPPINE
Assuming the 90 days trading horizon Integrated Micro Electronics is expected to under-perform the THE PHILIPPINE. In addition to that, Integrated Micro is 2.82 times more volatile than THE PHILIPPINE STOCK. It trades about -0.07 of its total potential returns per unit of risk. THE PHILIPPINE STOCK is currently generating about 0.01 per unit of volatility. If you would invest 654,103 in THE PHILIPPINE STOCK on September 14, 2024 and sell it today you would earn a total of 10,032 from holding THE PHILIPPINE STOCK or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.15% |
| Values | Daily Returns |
Integrated Micro Electronics vs. THE PHILIPPINE STOCK
Performance |
| Timeline |
Integrated Micro and THE PHILIPPINE Volatility Contrast
Predicted Return Density |
| Returns |
Integrated Micro Electronics
Pair trading matchups for Integrated Micro
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Pair Trading with Integrated Micro and THE PHILIPPINE
The main advantage of trading using opposite Integrated Micro and THE PHILIPPINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Micro position performs unexpectedly, THE PHILIPPINE 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 THE PHILIPPINE will offset losses from the drop in THE PHILIPPINE's long position.| Integrated Micro vs. GT Capital Holdings | Integrated Micro vs. Allhome Corp | Integrated Micro vs. Jollibee Foods Corp | Integrated Micro vs. LFM Properties Corp |
| THE PHILIPPINE vs. Apex Mining Co | THE PHILIPPINE vs. STI Education Systems | THE PHILIPPINE vs. Crown Asia Chemicals | THE PHILIPPINE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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