Correlation Between Philippine National and Axelum Resources
Can any of the company-specific risk be diversified away by investing in both Philippine National and Axelum Resources 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 National and Axelum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philippine National Bank and Axelum Resources Corp, you can compare the effects of market volatilities on Philippine National and Axelum Resources 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 National with a short position of Axelum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine National and Axelum Resources.
Diversification Opportunities for Philippine National and Axelum Resources
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Philippine and Axelum is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Philippine National Bank and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp and Philippine National 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 National Bank are associated (or correlated) with Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Philippine National i.e., Philippine National and Axelum Resources go up and down completely randomly.
Pair Corralation between Philippine National and Axelum Resources
Assuming the 90 days trading horizon Philippine National Bank is expected to generate 0.43 times more return on investment than Axelum Resources. However, Philippine National Bank is 2.33 times less risky than Axelum Resources. It trades about 0.06 of its potential returns per unit of risk. Axelum Resources Corp is currently generating about -0.01 per unit of risk. If you would invest 1,920 in Philippine National Bank on August 30, 2024 and sell it today you would earn a total of 740.00 from holding Philippine National Bank or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.42% |
| Values | Daily Returns |
Philippine National Bank vs. Axelum Resources Corp
Performance |
| Timeline |
| Philippine National Bank |
| Axelum Resources Corp |
Philippine National and Axelum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine National and Axelum Resources
The main advantage of trading using opposite Philippine National and Axelum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine National position performs unexpectedly, Axelum Resources 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 Axelum Resources will offset losses from the drop in Axelum Resources' long position.| Philippine National vs. Manila Mining Corp | Philippine National vs. Philex Mining Corp | Philippine National vs. Philippine Savings Bank | Philippine National vs. Globe Telecom |
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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 Stocks Directory module to find actively traded stocks across global markets.
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