Correlation Between Monde Nissin and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Monde Nissin and Cebu Air 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 Monde Nissin and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monde Nissin Corp and Cebu Air Preferred, you can compare the effects of market volatilities on Monde Nissin and Cebu Air 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 Monde Nissin with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monde Nissin and Cebu Air.
Diversification Opportunities for Monde Nissin and Cebu Air
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monde and Cebu is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Monde Nissin Corp and Cebu Air Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air Preferred and Monde Nissin 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 Monde Nissin Corp are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air Preferred has no effect on the direction of Monde Nissin i.e., Monde Nissin and Cebu Air go up and down completely randomly.
Pair Corralation between Monde Nissin and Cebu Air
Assuming the 90 days trading horizon Monde Nissin Corp is expected to under-perform the Cebu Air. In addition to that, Monde Nissin is 1.18 times more volatile than Cebu Air Preferred. It trades about -0.23 of its total potential returns per unit of risk. Cebu Air Preferred is currently generating about -0.03 per unit of volatility. If you would invest 3,780 in Cebu Air Preferred on September 3, 2024 and sell it today you would lose (70.00) from holding Cebu Air Preferred or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Monde Nissin Corp vs. Cebu Air Preferred
Performance |
| Timeline |
| Monde Nissin Corp |
| Cebu Air Preferred |
Monde Nissin and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monde Nissin and Cebu Air
The main advantage of trading using opposite Monde Nissin and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monde Nissin position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Monde Nissin vs. San Miguel Pure | Monde Nissin vs. Alliance Select Foods | Monde Nissin vs. Del Monte Pacific | Monde Nissin vs. GT Capital Holdings |
| Cebu Air vs. Converge Information Communications | Cebu Air vs. Lepanto Consolidated Mining | Cebu Air vs. Century Pacific Food | Cebu Air vs. Apex Mining Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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