Correlation Between Philippine Business and Asia United
Can any of the company-specific risk be diversified away by investing in both Philippine Business and Asia United 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 Asia United 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 Asia United Bank, you can compare the effects of market volatilities on Philippine Business and Asia United 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 Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Business and Asia United.
Diversification Opportunities for Philippine Business and Asia United
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Philippine and Asia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank 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 Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Philippine Business i.e., Philippine Business and Asia United go up and down completely randomly.
Pair Corralation between Philippine Business and Asia United
Assuming the 90 days trading horizon Philippine Business is expected to generate 5.71 times less return on investment than Asia United. But when comparing it to its historical volatility, Philippine Business Bank is 1.29 times less risky than Asia United. It trades about 0.06 of its potential returns per unit of risk. Asia United Bank is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Asia United Bank on August 31, 2024 and sell it today you would earn a total of 400.00 from holding Asia United Bank or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philippine Business Bank vs. Asia United Bank
Performance |
| Timeline |
| Philippine Business Bank |
| Asia United Bank |
Philippine Business and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Business and Asia United
The main advantage of trading using opposite Philippine Business and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Business position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.| Philippine Business vs. Metropolitan Bank Trust | Philippine Business vs. Philippine National Bank | Philippine Business vs. Asia United Bank | Philippine Business vs. Philippine Savings Bank |
| Asia United vs. Metropolitan Bank Trust | Asia United vs. Philippine National Bank | Asia United vs. Philippine Savings Bank | Asia United vs. East West Banking |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |