Correlation Between Philippine Savings and Asia United
Can any of the company-specific risk be diversified away by investing in both Philippine Savings 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 Savings 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 Savings Bank and Asia United Bank, you can compare the effects of market volatilities on Philippine Savings 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 Savings with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and Asia United.
Diversification Opportunities for Philippine Savings and Asia United
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Philippine and Asia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings 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 Savings 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 Savings 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 Savings i.e., Philippine Savings and Asia United go up and down completely randomly.
Pair Corralation between Philippine Savings and Asia United
Assuming the 90 days trading horizon Philippine Savings is expected to generate 3.41 times less return on investment than Asia United. But when comparing it to its historical volatility, Philippine Savings Bank is 2.3 times less risky than Asia United. It trades about 0.13 of its potential returns per unit of risk. Asia United Bank is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 6,520 in Asia United Bank on November 4, 2024 and sell it today you would earn a total of 440.00 from holding Asia United Bank or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philippine Savings Bank vs. Asia United Bank
Performance |
| Timeline |
| Philippine Savings Bank |
| Asia United Bank |
Philippine Savings and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and Asia United
The main advantage of trading using opposite Philippine Savings and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings 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 Savings vs. Prime Media Holdings | Philippine Savings vs. Globe Telecom | Philippine Savings vs. Jollibee Foods Corp | Philippine Savings vs. Top Frontier Investment |
| Asia United vs. Philex Mining Corp | Asia United vs. Allhome Corp | Asia United vs. Jollibee Foods Corp | Asia United vs. Transpacific Broadband Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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