Correlation Between Philippine Savings and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both Philippine Savings and Figaro Coffee 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 Figaro Coffee 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 Figaro Coffee Group, you can compare the effects of market volatilities on Philippine Savings and Figaro Coffee 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 Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and Figaro Coffee.
Diversification Opportunities for Philippine Savings and Figaro Coffee
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Philippine and Figaro is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group 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 Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of Philippine Savings i.e., Philippine Savings and Figaro Coffee go up and down completely randomly.
Pair Corralation between Philippine Savings and Figaro Coffee
Assuming the 90 days trading horizon Philippine Savings Bank is expected to under-perform the Figaro Coffee. In addition to that, Philippine Savings is 1.2 times more volatile than Figaro Coffee Group. It trades about -0.05 of its total potential returns per unit of risk. Figaro Coffee Group is currently generating about 0.18 per unit of volatility. If you would invest 77.00 in Figaro Coffee Group on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Figaro Coffee Group or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Philippine Savings Bank vs. Figaro Coffee Group
Performance |
| Timeline |
| Philippine Savings Bank |
| Figaro Coffee Group |
Philippine Savings and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and Figaro Coffee
The main advantage of trading using opposite Philippine Savings and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| Philippine Savings vs. BDO Unibank | Philippine Savings vs. Metropolitan Bank Trust | Philippine Savings vs. Security Bank Corp | Philippine Savings vs. Union Bank of |
| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Pacificonline Systems | Figaro Coffee vs. GT Capital Holdings | Figaro Coffee vs. Allhome 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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