Correlation Between Philippine Savings and ENEX Energy
Can any of the company-specific risk be diversified away by investing in both Philippine Savings and ENEX Energy 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 ENEX Energy 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 ENEX Energy Corp, you can compare the effects of market volatilities on Philippine Savings and ENEX Energy 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 ENEX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and ENEX Energy.
Diversification Opportunities for Philippine Savings and ENEX Energy
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Philippine and ENEX is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and ENEX Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEX Energy Corp 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 ENEX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEX Energy Corp has no effect on the direction of Philippine Savings i.e., Philippine Savings and ENEX Energy go up and down completely randomly.
Pair Corralation between Philippine Savings and ENEX Energy
Assuming the 90 days trading horizon Philippine Savings Bank is expected to under-perform the ENEX Energy. But the stock apears to be less risky and, when comparing its historical volatility, Philippine Savings Bank is 1.59 times less risky than ENEX Energy. The stock trades about -0.03 of its potential returns per unit of risk. The ENEX Energy Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 408.00 in ENEX Energy Corp on September 1, 2024 and sell it today you would earn a total of 17.00 from holding ENEX Energy Corp or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Philippine Savings Bank vs. ENEX Energy Corp
Performance |
| Timeline |
| Philippine Savings Bank |
| ENEX Energy Corp |
Philippine Savings and ENEX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and ENEX Energy
The main advantage of trading using opposite Philippine Savings and ENEX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings position performs unexpectedly, ENEX Energy 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 ENEX Energy will offset losses from the drop in ENEX Energy's long position.| Philippine Savings vs. Concepcion Industrial Corp | Philippine Savings vs. Globe Telecom | Philippine Savings vs. Top Frontier Investment | Philippine Savings vs. Lepanto Consolidated Mining |
| ENEX Energy vs. Oriental Petroleum and | ENEX Energy vs. Oriental Petroleum and | ENEX Energy vs. Basic Energy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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