Correlation Between Manila Mining and Philippine Business
Can any of the company-specific risk be diversified away by investing in both Manila Mining and Philippine Business 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 Philippine Business 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 Philippine Business Bank, you can compare the effects of market volatilities on Manila Mining and Philippine Business 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 Philippine Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and Philippine Business.
Diversification Opportunities for Manila Mining and Philippine Business
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manila and Philippine is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and Philippine Business Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippine Business Bank 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 Philippine Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippine Business Bank has no effect on the direction of Manila Mining i.e., Manila Mining and Philippine Business go up and down completely randomly.
Pair Corralation between Manila Mining and Philippine Business
Assuming the 90 days trading horizon Manila Mining Corp is expected to under-perform the Philippine Business. In addition to that, Manila Mining is 1.86 times more volatile than Philippine Business Bank. It trades about -0.11 of its total potential returns per unit of risk. Philippine Business Bank is currently generating about 0.06 per unit of volatility. If you would invest 672.00 in Philippine Business Bank on August 29, 2024 and sell it today you would earn a total of 258.00 from holding Philippine Business Bank or generate 38.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.69% |
| Values | Daily Returns |
Manila Mining Corp vs. Philippine Business Bank
Performance |
| Timeline |
| Manila Mining Corp |
| Philippine Business Bank |
Manila Mining and Philippine Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Mining and Philippine Business
The main advantage of trading using opposite Manila Mining and Philippine Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, Philippine Business 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 Philippine Business will offset losses from the drop in Philippine Business' long position.| Manila Mining vs. Crown Asia Chemicals | Manila Mining vs. Apex Mining Co | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Allhome Corp |
| Philippine Business vs. Apex Mining Co | Philippine Business vs. Pacificonline Systems | Philippine Business vs. SM Investments Corp | Philippine Business vs. Manila Mining Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |