Correlation Between Philippine Business and Atlas Consolidated
Can any of the company-specific risk be diversified away by investing in both Philippine Business and Atlas Consolidated 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 Philippine Business and Atlas Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philippine Business Bank and Atlas Consolidated Mining, you can compare the effects of market volatilities on Philippine Business and Atlas Consolidated 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 Philippine Business with a short position of Atlas Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Business and Atlas Consolidated.
Diversification Opportunities for Philippine Business and Atlas Consolidated
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Philippine and Atlas is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Atlas Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Consolidated Mining and Philippine Business 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 Philippine Business Bank are associated (or correlated) with Atlas Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Consolidated Mining has no effect on the direction of Philippine Business i.e., Philippine Business and Atlas Consolidated go up and down completely randomly.
Pair Corralation between Philippine Business and Atlas Consolidated
Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 1.15 times more return on investment than Atlas Consolidated. However, Philippine Business is 1.15 times more volatile than Atlas Consolidated Mining. It trades about 0.03 of its potential returns per unit of risk. Atlas Consolidated Mining is currently generating about 0.02 per unit of risk. If you would invest 773.00 in Philippine Business Bank on August 29, 2024 and sell it today you would earn a total of 157.00 from holding Philippine Business Bank or generate 20.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.44% |
| Values | Daily Returns |
Philippine Business Bank vs. Atlas Consolidated Mining
Performance |
| Timeline |
| Philippine Business Bank |
| Atlas Consolidated Mining |
Philippine Business and Atlas Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Business and Atlas Consolidated
The main advantage of trading using opposite Philippine Business and Atlas Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Business position performs unexpectedly, Atlas Consolidated 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 Atlas Consolidated will offset losses from the drop in Atlas Consolidated's long position.| Philippine Business vs. Apex Mining Co | Philippine Business vs. Pacificonline Systems | Philippine Business vs. SM Investments Corp | Philippine Business vs. Manila Mining Corp |
| Atlas Consolidated vs. SM Investments Corp | Atlas Consolidated vs. Lepanto Consolidated Mining | Atlas Consolidated vs. Integrated Micro Electronics | Atlas Consolidated vs. Top Frontier Investment |
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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