Correlation Between Manila Mining and Globe Telecom
Can any of the company-specific risk be diversified away by investing in both Manila Mining and Globe Telecom 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 Globe Telecom 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 Globe Telecom, you can compare the effects of market volatilities on Manila Mining and Globe Telecom 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 Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and Globe Telecom.
Diversification Opportunities for Manila Mining and Globe Telecom
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manila and Globe is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom 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 Globe Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Telecom has no effect on the direction of Manila Mining i.e., Manila Mining and Globe Telecom go up and down completely randomly.
Pair Corralation between Manila Mining and Globe Telecom
Assuming the 90 days trading horizon Manila Mining Corp is expected to generate 2.12 times more return on investment than Globe Telecom. However, Manila Mining is 2.12 times more volatile than Globe Telecom. It trades about 0.54 of its potential returns per unit of risk. Globe Telecom is currently generating about 0.26 per unit of risk. If you would invest 0.27 in Manila Mining Corp on October 25, 2024 and sell it today you would earn a total of 0.06 from holding Manila Mining Corp or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.82% |
| Values | Daily Returns |
Manila Mining Corp vs. Globe Telecom
Performance |
| Timeline |
| Manila Mining Corp |
| Globe Telecom |
Manila Mining and Globe Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Mining and Globe Telecom
The main advantage of trading using opposite Manila Mining and Globe Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, Globe Telecom 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 Globe Telecom will offset losses from the drop in Globe Telecom's long position.| Manila Mining vs. Converge Information Communications | Manila Mining vs. Transpacific Broadband Group | Manila Mining vs. National Reinsurance | Manila Mining vs. Allhome Corp |
| Globe Telecom vs. Robinsons Retail Holdings | Globe Telecom vs. Crown Asia Chemicals | Globe Telecom vs. Manila Mining Corp | Globe Telecom 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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