Correlation Between Philippine Savings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Philippine Savings and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Philippine Savings and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and Dow Jones.
Diversification Opportunities for Philippine Savings and Dow Jones
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Philippine and Dow is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Philippine Savings i.e., Philippine Savings and Dow Jones go up and down completely randomly.
Pair Corralation between Philippine Savings and Dow Jones
Assuming the 90 days trading horizon Philippine Savings Bank is expected to generate 2.24 times more return on investment than Dow Jones. However, Philippine Savings is 2.24 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 5,220 in Philippine Savings Bank on November 5, 2024 and sell it today you would earn a total of 700.00 from holding Philippine Savings Bank or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.14% |
| Values | Daily Returns |
Philippine Savings Bank vs. Dow Jones Industrial
Performance |
| Timeline |
Philippine Savings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Philippine Savings Bank
Pair trading matchups for Philippine Savings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Philippine Savings and Dow Jones
The main advantage of trading using opposite Philippine Savings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Philippine Savings vs. Robinsons Retail Holdings | Philippine Savings vs. Crown Asia Chemicals | Philippine Savings vs. Century Pacific Food | Philippine Savings vs. Metro Retail Stores |
| Dow Jones vs. Fernhill Beverage | Dow Jones vs. Fomento Economico Mexicano | Dow Jones vs. Loud Beverage Group | Dow Jones vs. Diageo PLC ADR |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |