Correlation Between Security Bank and Aboitiz Equity
Can any of the company-specific risk be diversified away by investing in both Security Bank and Aboitiz Equity 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 Security Bank and Aboitiz Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Bank Corp and Aboitiz Equity Ventures, you can compare the effects of market volatilities on Security Bank and Aboitiz Equity 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 Security Bank with a short position of Aboitiz Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Aboitiz Equity.
Diversification Opportunities for Security Bank and Aboitiz Equity
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Security and Aboitiz is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Aboitiz Equity Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Equity Ventures and Security Bank 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 Security Bank Corp are associated (or correlated) with Aboitiz Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Equity Ventures has no effect on the direction of Security Bank i.e., Security Bank and Aboitiz Equity go up and down completely randomly.
Pair Corralation between Security Bank and Aboitiz Equity
Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the Aboitiz Equity. In addition to that, Security Bank is 1.06 times more volatile than Aboitiz Equity Ventures. It trades about -0.11 of its total potential returns per unit of risk. Aboitiz Equity Ventures is currently generating about -0.1 per unit of volatility. If you would invest 3,495 in Aboitiz Equity Ventures on August 31, 2024 and sell it today you would lose (195.00) from holding Aboitiz Equity Ventures or give up 5.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. Aboitiz Equity Ventures
Performance |
| Timeline |
| Security Bank Corp |
| Aboitiz Equity Ventures |
Security Bank and Aboitiz Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Aboitiz Equity
The main advantage of trading using opposite Security Bank and Aboitiz Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Aboitiz Equity 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 Aboitiz Equity will offset losses from the drop in Aboitiz Equity's long position.| Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Philippine National Bank | Security Bank vs. Asia United Bank | Security Bank vs. Philippine Savings Bank |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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