Correlation Between Security Bank and Aboitiz Power
Can any of the company-specific risk be diversified away by investing in both Security Bank and Aboitiz Power 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 Power 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 Power Corp, you can compare the effects of market volatilities on Security Bank and Aboitiz Power 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 Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Aboitiz Power.
Diversification Opportunities for Security Bank and Aboitiz Power
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and Aboitiz is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Aboitiz Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Power Corp 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 Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Power Corp has no effect on the direction of Security Bank i.e., Security Bank and Aboitiz Power go up and down completely randomly.
Pair Corralation between Security Bank and Aboitiz Power
Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the Aboitiz Power. In addition to that, Security Bank is 1.99 times more volatile than Aboitiz Power Corp. It trades about -0.26 of its total potential returns per unit of risk. Aboitiz Power Corp is currently generating about 0.21 per unit of volatility. If you would invest 3,770 in Aboitiz Power Corp on October 20, 2024 and sell it today you would earn a total of 175.00 from holding Aboitiz Power Corp or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. Aboitiz Power Corp
Performance |
| Timeline |
| Security Bank Corp |
| Aboitiz Power Corp |
Security Bank and Aboitiz Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Aboitiz Power
The main advantage of trading using opposite Security Bank and Aboitiz Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Aboitiz Power 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 Power will offset losses from the drop in Aboitiz Power's long position.| Security Bank vs. Lepanto Consolidated Mining | Security Bank vs. Atlas Consolidated Mining | Security Bank vs. Converge Information Communications | Security Bank vs. Semirara Mining Corp |
| Aboitiz Power vs. Suntrust Home Developers | Aboitiz Power vs. Philex Mining Corp | Aboitiz Power vs. Converge Information Communications | Aboitiz Power vs. Top Frontier Investment |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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