Correlation Between Philippine Savings and Filinvest Land
Can any of the company-specific risk be diversified away by investing in both Philippine Savings and Filinvest Land 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 Filinvest Land 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 Filinvest Land, you can compare the effects of market volatilities on Philippine Savings and Filinvest Land 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 Filinvest Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and Filinvest Land.
Diversification Opportunities for Philippine Savings and Filinvest Land
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Philippine and Filinvest is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and Filinvest Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest Land 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 Filinvest Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest Land has no effect on the direction of Philippine Savings i.e., Philippine Savings and Filinvest Land go up and down completely randomly.
Pair Corralation between Philippine Savings and Filinvest Land
Assuming the 90 days trading horizon Philippine Savings Bank is expected to generate 1.5 times more return on investment than Filinvest Land. However, Philippine Savings is 1.5 times more volatile than Filinvest Land. It trades about 0.04 of its potential returns per unit of risk. Filinvest Land is currently generating about -0.23 per unit of risk. If you would invest 5,920 in Philippine Savings Bank on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Philippine Savings Bank or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Philippine Savings Bank vs. Filinvest Land
Performance |
| Timeline |
| Philippine Savings Bank |
| Filinvest Land |
Philippine Savings and Filinvest Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and Filinvest Land
The main advantage of trading using opposite Philippine Savings and Filinvest Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings position performs unexpectedly, Filinvest Land 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 Filinvest Land will offset losses from the drop in Filinvest Land'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 |
| Filinvest Land vs. Ayala Land | Filinvest Land vs. Robinsons Land Corp | Filinvest Land vs. Filinvest Development Coproration | Filinvest Land vs. DoubleDragon Properties 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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