Correlation Between Manila Electric and Emperador
Can any of the company-specific risk be diversified away by investing in both Manila Electric and Emperador 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 Electric and Emperador into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manila Electric Co and Emperador, you can compare the effects of market volatilities on Manila Electric and Emperador 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 Electric with a short position of Emperador. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Electric and Emperador.
Diversification Opportunities for Manila Electric and Emperador
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manila and Emperador is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Manila Electric Co and Emperador in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emperador and Manila Electric 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 Electric Co are associated (or correlated) with Emperador. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emperador has no effect on the direction of Manila Electric i.e., Manila Electric and Emperador go up and down completely randomly.
Pair Corralation between Manila Electric and Emperador
Assuming the 90 days trading horizon Manila Electric Co is expected to generate 8.68 times more return on investment than Emperador. However, Manila Electric is 8.68 times more volatile than Emperador. It trades about -0.01 of its potential returns per unit of risk. Emperador is currently generating about -0.15 per unit of risk. If you would invest 48,520 in Manila Electric Co on September 13, 2024 and sell it today you would lose (520.00) from holding Manila Electric Co or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manila Electric Co vs. Emperador
Performance |
| Timeline |
| Manila Electric |
| Emperador |
Manila Electric and Emperador Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Electric and Emperador
The main advantage of trading using opposite Manila Electric and Emperador positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Electric position performs unexpectedly, Emperador 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 Emperador will offset losses from the drop in Emperador's long position.| Manila Electric vs. Premiere Entertainment | Manila Electric vs. Lepanto Consolidated Mining | Manila Electric vs. SM Investments Corp | Manila Electric vs. Converge Information Communications |
| Emperador vs. SM Investments Corp | Emperador vs. San Miguel Pure | Emperador vs. Ayala Corp | Emperador vs. Ayala Land |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| 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 | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |