Correlation Between Philippine Business and Harbor Star
Can any of the company-specific risk be diversified away by investing in both Philippine Business and Harbor Star 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 Harbor Star 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 Harbor Star Shipping, you can compare the effects of market volatilities on Philippine Business and Harbor Star 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 Harbor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Business and Harbor Star.
Diversification Opportunities for Philippine Business and Harbor Star
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Philippine and Harbor is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Harbor Star Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Star Shipping 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 Harbor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Star Shipping has no effect on the direction of Philippine Business i.e., Philippine Business and Harbor Star go up and down completely randomly.
Pair Corralation between Philippine Business and Harbor Star
Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 0.97 times more return on investment than Harbor Star. However, Philippine Business Bank is 1.03 times less risky than Harbor Star. It trades about 0.03 of its potential returns per unit of risk. Harbor Star Shipping is currently generating about -0.02 per unit of risk. If you would invest 782.00 in Philippine Business Bank on September 4, 2024 and sell it today you would earn a total of 148.00 from holding Philippine Business Bank or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.4% |
| Values | Daily Returns |
Philippine Business Bank vs. Harbor Star Shipping
Performance |
| Timeline |
| Philippine Business Bank |
| Harbor Star Shipping |
Philippine Business and Harbor Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Business and Harbor Star
The main advantage of trading using opposite Philippine Business and Harbor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Business position performs unexpectedly, Harbor Star 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 Harbor Star will offset losses from the drop in Harbor Star's long position.| Philippine Business vs. COL Financial Group | Philippine Business vs. Robinsons Retail Holdings | Philippine Business vs. Atlas Consolidated Mining | Philippine Business vs. Security Bank Corp |
| Harbor Star vs. STI Education Systems | Harbor Star vs. Sun Life Financial | Harbor Star vs. Semirara Mining Corp | Harbor Star vs. Philippine Business Bank |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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