Correlation Between THE PHILIPPINE and Bank of the
Can any of the company-specific risk be diversified away by investing in both THE PHILIPPINE and Bank of the 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 THE PHILIPPINE and Bank of the into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THE PHILIPPINE STOCK and Bank of the, you can compare the effects of market volatilities on THE PHILIPPINE and Bank of the 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 THE PHILIPPINE with a short position of Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of THE PHILIPPINE and Bank of the.
Diversification Opportunities for THE PHILIPPINE and Bank of the
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THE and Bank is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding THE PHILIPPINE STOCK and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and THE PHILIPPINE 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 THE PHILIPPINE STOCK are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of THE PHILIPPINE i.e., THE PHILIPPINE and Bank of the go up and down completely randomly.
Pair Corralation between THE PHILIPPINE and Bank of the
Assuming the 90 days trading horizon THE PHILIPPINE is expected to generate 11.44 times less return on investment than Bank of the. But when comparing it to its historical volatility, THE PHILIPPINE STOCK is 1.75 times less risky than Bank of the. It trades about 0.01 of its potential returns per unit of risk. Bank of the is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,967 in Bank of the on August 31, 2024 and sell it today you would earn a total of 2,993 from holding Bank of the or generate 30.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.45% |
| Values | Daily Returns |
THE PHILIPPINE STOCK vs. Bank of the
Performance |
| Timeline |
THE PHILIPPINE and Bank of the Volatility Contrast
Predicted Return Density |
| Returns |
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Bank of the
Pair trading matchups for Bank of the
Pair Trading with THE PHILIPPINE and Bank of the
The main advantage of trading using opposite THE PHILIPPINE and Bank of the positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THE PHILIPPINE position performs unexpectedly, Bank of the 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 Bank of the will offset losses from the drop in Bank of the's long position.| THE PHILIPPINE vs. Semirara Mining Corp | THE PHILIPPINE vs. Philippine Savings Bank | THE PHILIPPINE vs. SM Investments Corp | THE PHILIPPINE vs. Converge Information Communications |
| Bank of the vs. Semirara Mining Corp | Bank of the vs. Manila Mining Corp | Bank of the vs. Apex Mining Co | Bank of the vs. Prime Media Holdings |
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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