Correlation Between Philex Mining and Philippine National
Can any of the company-specific risk be diversified away by investing in both Philex Mining and Philippine National 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 Philippine National 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 Philippine National Bank, you can compare the effects of market volatilities on Philex Mining and Philippine National 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 Philippine National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Philippine National.
Diversification Opportunities for Philex Mining and Philippine National
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Philex and Philippine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Philippine National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippine National Bank 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 Philippine National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippine National Bank has no effect on the direction of Philex Mining i.e., Philex Mining and Philippine National go up and down completely randomly.
Pair Corralation between Philex Mining and Philippine National
Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the Philippine National. In addition to that, Philex Mining is 1.21 times more volatile than Philippine National Bank. It trades about -0.02 of its total potential returns per unit of risk. Philippine National Bank is currently generating about 0.07 per unit of volatility. If you would invest 2,250 in Philippine National Bank on September 1, 2024 and sell it today you would earn a total of 380.00 from holding Philippine National Bank or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Philex Mining Corp vs. Philippine National Bank
Performance |
| Timeline |
| Philex Mining Corp |
| Philippine National Bank |
Philex Mining and Philippine National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philex Mining and Philippine National
The main advantage of trading using opposite Philex Mining and Philippine National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philex Mining position performs unexpectedly, Philippine National 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 Philippine National will offset losses from the drop in Philippine National's long position.| Philex Mining vs. Figaro Coffee Group | Philex Mining vs. Lepanto Consolidated Mining | Philex Mining vs. Cebu Air Preferred | Philex Mining vs. SM Investments Corp |
| Philippine National vs. Metropolitan Bank Trust | Philippine National vs. Asia United Bank | Philippine National vs. Philippine Savings Bank |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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