Correlation Between Manila Mining and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Manila Mining and BDO Unibank 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 Manila Mining and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manila Mining Corp and BDO Unibank, you can compare the effects of market volatilities on Manila Mining and BDO Unibank 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 Manila Mining with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and BDO Unibank.
Diversification Opportunities for Manila Mining and BDO Unibank
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manila and BDO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Manila Mining 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 Manila Mining Corp are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank has no effect on the direction of Manila Mining i.e., Manila Mining and BDO Unibank go up and down completely randomly.
Pair Corralation between Manila Mining and BDO Unibank
Assuming the 90 days trading horizon Manila Mining Corp is expected to under-perform the BDO Unibank. But the stock apears to be less risky and, when comparing its historical volatility, Manila Mining Corp is 1.2 times less risky than BDO Unibank. The stock trades about -0.71 of its potential returns per unit of risk. The BDO Unibank is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 15,700 in BDO Unibank on August 30, 2024 and sell it today you would lose (390.00) from holding BDO Unibank or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
Manila Mining Corp vs. BDO Unibank
Performance |
| Timeline |
| Manila Mining Corp |
| BDO Unibank |
Manila Mining and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Mining and BDO Unibank
The main advantage of trading using opposite Manila Mining and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.| Manila Mining vs. Semirara Mining Corp | Manila Mining vs. Lepanto Consolidated Mining | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Metro Retail Stores |
| BDO Unibank vs. Converge Information Communications | BDO Unibank vs. Lepanto Consolidated Mining | BDO Unibank vs. Manila Mining Corp | BDO Unibank vs. Crown Asia Chemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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