Correlation Between Security Bank and Cebu Landmasters
Can any of the company-specific risk be diversified away by investing in both Security Bank and Cebu Landmasters 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 Cebu Landmasters 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 Cebu Landmasters, you can compare the effects of market volatilities on Security Bank and Cebu Landmasters 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 Cebu Landmasters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Cebu Landmasters.
Diversification Opportunities for Security Bank and Cebu Landmasters
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Security and Cebu is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Cebu Landmasters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Landmasters 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 Cebu Landmasters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Landmasters has no effect on the direction of Security Bank i.e., Security Bank and Cebu Landmasters go up and down completely randomly.
Pair Corralation between Security Bank and Cebu Landmasters
Assuming the 90 days trading horizon Security Bank is expected to generate 1.68 times less return on investment than Cebu Landmasters. In addition to that, Security Bank is 1.26 times more volatile than Cebu Landmasters. It trades about 0.01 of its total potential returns per unit of risk. Cebu Landmasters is currently generating about 0.02 per unit of volatility. If you would invest 241.00 in Cebu Landmasters on September 14, 2024 and sell it today you would earn a total of 24.00 from holding Cebu Landmasters or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Security Bank Corp vs. Cebu Landmasters
Performance |
| Timeline |
| Security Bank Corp |
| Cebu Landmasters |
Security Bank and Cebu Landmasters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Cebu Landmasters
The main advantage of trading using opposite Security Bank and Cebu Landmasters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Cebu Landmasters 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 Landmasters will offset losses from the drop in Cebu Landmasters' long position.| Security Bank vs. BDO Unibank | Security Bank vs. Union Bank of | Security Bank vs. Philippine National Bank | Security Bank vs. Asia United 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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