Correlation Between THE PHILIPPINE and Dito CME
Can any of the company-specific risk be diversified away by investing in both THE PHILIPPINE and Dito CME 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 Dito CME 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 Dito CME Holdings, you can compare the effects of market volatilities on THE PHILIPPINE and Dito CME 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 Dito CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of THE PHILIPPINE and Dito CME.
Diversification Opportunities for THE PHILIPPINE and Dito CME
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between THE and Dito is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding THE PHILIPPINE STOCK and Dito CME Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dito CME Holdings 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 Dito CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dito CME Holdings has no effect on the direction of THE PHILIPPINE i.e., THE PHILIPPINE and Dito CME go up and down completely randomly.
Pair Corralation between THE PHILIPPINE and Dito CME
Assuming the 90 days trading horizon THE PHILIPPINE STOCK is expected to generate 0.3 times more return on investment than Dito CME. However, THE PHILIPPINE STOCK is 3.28 times less risky than Dito CME. It trades about 0.01 of its potential returns per unit of risk. Dito CME Holdings is currently generating about -0.04 per unit of risk. If you would invest 658,238 in THE PHILIPPINE STOCK on September 3, 2024 and sell it today you would earn a total of 3,147 from holding THE PHILIPPINE STOCK or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.97% |
| Values | Daily Returns |
THE PHILIPPINE STOCK vs. Dito CME Holdings
Performance |
| Timeline |
THE PHILIPPINE and Dito CME Volatility Contrast
Predicted Return Density |
| Returns |
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Dito CME Holdings
Pair trading matchups for Dito CME
Pair Trading with THE PHILIPPINE and Dito CME
The main advantage of trading using opposite THE PHILIPPINE and Dito CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THE PHILIPPINE position performs unexpectedly, Dito CME 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 Dito CME will offset losses from the drop in Dito CME's long position.| THE PHILIPPINE vs. Bank of the | THE PHILIPPINE vs. Sun Life Financial | THE PHILIPPINE vs. Philippine Business Bank | THE PHILIPPINE vs. Allhome Corp |
| Dito CME vs. Cebu Air Preferred | Dito CME vs. Premiere Entertainment | Dito CME vs. Manila Mining Corp | Dito CME vs. Metro Retail Stores |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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