Correlation Between Metro Retail and Cebu Landmasters
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Cebu Landmasters 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 Metro Retail and Cebu Landmasters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Retail Stores and Cebu Landmasters, you can compare the effects of market volatilities on Metro Retail and Cebu Landmasters 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 Metro Retail with a short position of Cebu Landmasters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Cebu Landmasters.
Diversification Opportunities for Metro Retail and Cebu Landmasters
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metro and Cebu is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Cebu Landmasters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Landmasters and Metro Retail 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 Metro Retail Stores are associated (or correlated) with Cebu Landmasters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Landmasters has no effect on the direction of Metro Retail i.e., Metro Retail and Cebu Landmasters go up and down completely randomly.
Pair Corralation between Metro Retail and Cebu Landmasters
Assuming the 90 days trading horizon Metro Retail Stores is expected to under-perform the Cebu Landmasters. In addition to that, Metro Retail is 1.22 times more volatile than Cebu Landmasters. It trades about -0.03 of its total potential returns per unit of risk. Cebu Landmasters is currently generating about 0.02 per unit of volatility. If you would invest 262.00 in Cebu Landmasters on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Cebu Landmasters or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.93% |
| Values | Daily Returns |
Metro Retail Stores vs. Cebu Landmasters
Performance |
| Timeline |
| Metro Retail Stores |
| Cebu Landmasters |
Metro Retail and Cebu Landmasters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Cebu Landmasters
The main advantage of trading using opposite Metro Retail and Cebu Landmasters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Cebu Landmasters 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 Landmasters will offset losses from the drop in Cebu Landmasters' long position.| Metro Retail vs. Philex Mining Corp | Metro Retail vs. Globe Telecom | Metro Retail vs. Atlas Consolidated Mining | Metro Retail vs. Allhome Corp |
| Cebu Landmasters vs. Philex Mining Corp | Cebu Landmasters vs. COL Financial Group | Cebu Landmasters vs. Bank of the | Cebu Landmasters vs. Transpacific Broadband Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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