Correlation Between Metro Retail and Cirtek Holdings
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Cirtek Holdings 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 Cirtek Holdings 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 Cirtek Holdings Philippines, you can compare the effects of market volatilities on Metro Retail and Cirtek Holdings 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 Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Cirtek Holdings.
Diversification Opportunities for Metro Retail and Cirtek Holdings
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Metro and Cirtek is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil 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 Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Metro Retail i.e., Metro Retail and Cirtek Holdings go up and down completely randomly.
Pair Corralation between Metro Retail and Cirtek Holdings
Assuming the 90 days trading horizon Metro Retail Stores is expected to generate 0.33 times more return on investment than Cirtek Holdings. However, Metro Retail Stores is 3.0 times less risky than Cirtek Holdings. It trades about 0.0 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.01 per unit of risk. If you would invest 127.00 in Metro Retail Stores on September 3, 2024 and sell it today you would lose (6.00) from holding Metro Retail Stores or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 47.21% |
| Values | Daily Returns |
Metro Retail Stores vs. Cirtek Holdings Philippines
Performance |
| Timeline |
| Metro Retail Stores |
| Cirtek Holdings Phil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Metro Retail and Cirtek Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Cirtek Holdings
The main advantage of trading using opposite Metro Retail and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Cirtek Holdings 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 Cirtek Holdings will offset losses from the drop in Cirtek Holdings' long position.| Metro Retail vs. GT Capital Holdings | Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp |
| Cirtek Holdings vs. Cebu Air Preferred | Cirtek Holdings vs. Metro Retail Stores | Cirtek Holdings vs. Transpacific Broadband Group | Cirtek Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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