Correlation Between THE PHILIPPINE and Wilcon Depot
Can any of the company-specific risk be diversified away by investing in both THE PHILIPPINE and Wilcon Depot 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 Wilcon Depot 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 Wilcon Depot, you can compare the effects of market volatilities on THE PHILIPPINE and Wilcon Depot 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 Wilcon Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of THE PHILIPPINE and Wilcon Depot.
Diversification Opportunities for THE PHILIPPINE and Wilcon Depot
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THE and Wilcon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding THE PHILIPPINE STOCK and Wilcon Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilcon Depot 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 Wilcon Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilcon Depot has no effect on the direction of THE PHILIPPINE i.e., THE PHILIPPINE and Wilcon Depot go up and down completely randomly.
Pair Corralation between THE PHILIPPINE and Wilcon Depot
Assuming the 90 days trading horizon THE PHILIPPINE STOCK is expected to generate 0.57 times more return on investment than Wilcon Depot. However, THE PHILIPPINE STOCK is 1.76 times less risky than Wilcon Depot. It trades about -0.3 of its potential returns per unit of risk. Wilcon Depot is currently generating about -0.32 per unit of risk. If you would invest 728,024 in THE PHILIPPINE STOCK on August 31, 2024 and sell it today you would lose (64,170) from holding THE PHILIPPINE STOCK or give up 8.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
THE PHILIPPINE STOCK vs. Wilcon Depot
Performance |
| Timeline |
THE PHILIPPINE and Wilcon Depot Volatility Contrast
Predicted Return Density |
| Returns |
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Wilcon Depot
Pair trading matchups for Wilcon Depot
Pair Trading with THE PHILIPPINE and Wilcon Depot
The main advantage of trading using opposite THE PHILIPPINE and Wilcon Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THE PHILIPPINE position performs unexpectedly, Wilcon Depot 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 Wilcon Depot will offset losses from the drop in Wilcon Depot'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 |
| Wilcon Depot vs. GT Capital Holdings | Wilcon Depot vs. Allhome Corp | Wilcon Depot vs. Jollibee Foods Corp | Wilcon Depot vs. LFM 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 CEOs Directory module to screen CEOs from public companies around the world.
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