Correlation Between Manila Electric and Puregold Price
Can any of the company-specific risk be diversified away by investing in both Manila Electric and Puregold Price 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 Puregold Price 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 Puregold Price Club, you can compare the effects of market volatilities on Manila Electric and Puregold Price 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 Puregold Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Electric and Puregold Price.
Diversification Opportunities for Manila Electric and Puregold Price
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Manila and Puregold is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Manila Electric Co and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club 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 Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of Manila Electric i.e., Manila Electric and Puregold Price go up and down completely randomly.
Pair Corralation between Manila Electric and Puregold Price
Assuming the 90 days trading horizon Manila Electric Co is expected to generate 1.04 times more return on investment than Puregold Price. However, Manila Electric is 1.04 times more volatile than Puregold Price Club. It trades about 0.11 of its potential returns per unit of risk. Puregold Price Club is currently generating about 0.07 per unit of risk. If you would invest 41,500 in Manila Electric Co on September 2, 2024 and sell it today you would earn a total of 6,400 from holding Manila Electric Co or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manila Electric Co vs. Puregold Price Club
Performance |
| Timeline |
| Manila Electric |
| Puregold Price Club |
Manila Electric and Puregold Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Electric and Puregold Price
The main advantage of trading using opposite Manila Electric and Puregold Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Electric position performs unexpectedly, Puregold Price 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 Puregold Price will offset losses from the drop in Puregold Price's long position.| Manila Electric vs. Aboitiz Equity Ventures | Manila Electric vs. Allhome Corp | Manila Electric vs. LFM Properties Corp | Manila Electric vs. Altus Property Ventures |
| Puregold Price vs. Cosco Capital | Puregold Price vs. Keepers Holdings | Puregold Price vs. GT Capital Holdings | Puregold Price vs. Allhome 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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