Correlation Between Philippine Savings and Golden Haven
Can any of the company-specific risk be diversified away by investing in both Philippine Savings and Golden Haven 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 Golden Haven 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 Golden Haven Memorial, you can compare the effects of market volatilities on Philippine Savings and Golden Haven 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 Golden Haven. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and Golden Haven.
Diversification Opportunities for Philippine Savings and Golden Haven
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Philippine and Golden is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and Golden Haven Memorial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Haven Memorial 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 Golden Haven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Haven Memorial has no effect on the direction of Philippine Savings i.e., Philippine Savings and Golden Haven go up and down completely randomly.
Pair Corralation between Philippine Savings and Golden Haven
Assuming the 90 days trading horizon Philippine Savings is expected to generate 9.93 times less return on investment than Golden Haven. But when comparing it to its historical volatility, Philippine Savings Bank is 1.12 times less risky than Golden Haven. It trades about 0.02 of its potential returns per unit of risk. Golden Haven Memorial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 63,000 in Golden Haven Memorial on August 24, 2024 and sell it today you would earn a total of 147,200 from holding Golden Haven Memorial or generate 233.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.23% |
| Values | Daily Returns |
Philippine Savings Bank vs. Golden Haven Memorial
Performance |
| Timeline |
| Philippine Savings Bank |
| Golden Haven Memorial |
Philippine Savings and Golden Haven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and Golden Haven
The main advantage of trading using opposite Philippine Savings and Golden Haven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings position performs unexpectedly, Golden Haven 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 Golden Haven will offset losses from the drop in Golden Haven's long position.| Philippine Savings vs. Apex Mining Co | Philippine Savings vs. Converge Information Communications | Philippine Savings vs. Figaro Coffee Group | Philippine Savings vs. Alliance Select Foods |
| Golden Haven vs. Philippine Savings Bank | Golden Haven vs. Atlas Consolidated Mining | Golden Haven vs. Allhome Corp | Golden Haven vs. Jollibee Foods 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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