Correlation Between Philippine Business and Allhome Corp
Can any of the company-specific risk be diversified away by investing in both Philippine Business and Allhome Corp 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 Allhome Corp 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 Allhome Corp, you can compare the effects of market volatilities on Philippine Business and Allhome Corp 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 Allhome Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Business and Allhome Corp.
Diversification Opportunities for Philippine Business and Allhome Corp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Philippine and Allhome is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Allhome Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allhome Corp 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 Allhome Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allhome Corp has no effect on the direction of Philippine Business i.e., Philippine Business and Allhome Corp go up and down completely randomly.
Pair Corralation between Philippine Business and Allhome Corp
Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 0.66 times more return on investment than Allhome Corp. However, Philippine Business Bank is 1.51 times less risky than Allhome Corp. It trades about 0.19 of its potential returns per unit of risk. Allhome Corp is currently generating about -0.03 per unit of risk. If you would invest 800.00 in Philippine Business Bank on September 12, 2024 and sell it today you would earn a total of 150.00 from holding Philippine Business Bank or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.06% |
| Values | Daily Returns |
Philippine Business Bank vs. Allhome Corp
Performance |
| Timeline |
| Philippine Business Bank |
| Allhome Corp |
Philippine Business and Allhome Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Business and Allhome Corp
The main advantage of trading using opposite Philippine Business and Allhome Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Business position performs unexpectedly, Allhome Corp 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 Allhome Corp will offset losses from the drop in Allhome Corp's long position.| Philippine Business vs. BDO Unibank | Philippine Business vs. Metropolitan Bank Trust | Philippine Business vs. Security Bank Corp | Philippine Business vs. Union Bank of |
| Allhome Corp vs. GT Capital Holdings | Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp | Allhome Corp vs. Monde Nissin 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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