Correlation Between THE PHILIPPINE and Golden Haven
Can any of the company-specific risk be diversified away by investing in both THE PHILIPPINE 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 THE PHILIPPINE and Golden Haven 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 Golden Haven Memorial, you can compare the effects of market volatilities on THE PHILIPPINE 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 THE PHILIPPINE with a short position of Golden Haven. Check out your portfolio center. Please also check ongoing floating volatility patterns of THE PHILIPPINE and Golden Haven.
Diversification Opportunities for THE PHILIPPINE and Golden Haven
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between THE and Golden is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding THE PHILIPPINE STOCK 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 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 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 THE PHILIPPINE i.e., THE PHILIPPINE and Golden Haven go up and down completely randomly.
Pair Corralation between THE PHILIPPINE and Golden Haven
Assuming the 90 days trading horizon THE PHILIPPINE STOCK is expected to under-perform the Golden Haven. But the index apears to be less risky and, when comparing its historical volatility, THE PHILIPPINE STOCK is 2.47 times less risky than Golden Haven. The index trades about -0.23 of its potential returns per unit of risk. The Golden Haven Memorial is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 222,000 in Golden Haven Memorial on August 24, 2024 and sell it today you would lose (11,800) from holding Golden Haven Memorial or give up 5.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
THE PHILIPPINE STOCK vs. Golden Haven Memorial
Performance |
| Timeline |
THE PHILIPPINE and Golden Haven Volatility Contrast
Predicted Return Density |
| Returns |
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Golden Haven Memorial
Pair trading matchups for Golden Haven
Pair Trading with THE PHILIPPINE and Golden Haven
The main advantage of trading using opposite THE PHILIPPINE and Golden Haven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THE PHILIPPINE 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.| THE PHILIPPINE vs. Philippine Savings Bank | THE PHILIPPINE vs. Asia United Bank | THE PHILIPPINE vs. BDO Unibank | THE PHILIPPINE vs. Rizal Commercial Banking |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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