Correlation Between Philex Mining and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Philex Mining and Cebu Air 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 Philex Mining and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philex Mining Corp and Cebu Air Preferred, you can compare the effects of market volatilities on Philex Mining and Cebu Air 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 Philex Mining with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Cebu Air.
Diversification Opportunities for Philex Mining and Cebu Air
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Philex and Cebu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Cebu Air Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air Preferred and Philex Mining 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 Philex Mining Corp are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air Preferred has no effect on the direction of Philex Mining i.e., Philex Mining and Cebu Air go up and down completely randomly.
Pair Corralation between Philex Mining and Cebu Air
Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the Cebu Air. In addition to that, Philex Mining is 1.28 times more volatile than Cebu Air Preferred. It trades about -0.02 of its total potential returns per unit of risk. Cebu Air Preferred is currently generating about 0.05 per unit of volatility. If you would invest 3,140 in Cebu Air Preferred on August 29, 2024 and sell it today you would earn a total of 510.00 from holding Cebu Air Preferred or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.63% |
| Values | Daily Returns |
Philex Mining Corp vs. Cebu Air Preferred
Performance |
| Timeline |
| Philex Mining Corp |
| Cebu Air Preferred |
Philex Mining and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philex Mining and Cebu Air
The main advantage of trading using opposite Philex Mining and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philex Mining position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Philex Mining vs. Pacificonline Systems | Philex Mining vs. BDO Unibank | Philex Mining vs. Metropolitan Bank Trust | Philex Mining vs. Converge Information Communications |
| Cebu Air vs. Allhome Corp | Cebu Air vs. Altus Property Ventures | Cebu Air vs. AgriNurture | Cebu Air vs. Wilcon Depot |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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