Correlation Between Security Bank and Converge Information
Can any of the company-specific risk be diversified away by investing in both Security Bank and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Security Bank and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Converge Information.
Diversification Opportunities for Security Bank and Converge Information
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and Converge is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Security Bank i.e., Security Bank and Converge Information go up and down completely randomly.
Pair Corralation between Security Bank and Converge Information
Assuming the 90 days trading horizon Security Bank Corp is expected to under-perform the Converge Information. But the stock apears to be less risky and, when comparing its historical volatility, Security Bank Corp is 1.04 times less risky than Converge Information. The stock trades about -0.28 of its potential returns per unit of risk. The Converge Information Communications is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,614 in Converge Information Communications on November 3, 2024 and sell it today you would lose (14.00) from holding Converge Information Communications or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. Converge Information Communica
Performance |
| Timeline |
| Security Bank Corp |
| Converge Information |
Security Bank and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Converge Information
The main advantage of trading using opposite Security Bank and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Security Bank vs. Crown Asia Chemicals | Security Bank vs. Robinsons Retail Holdings | Security Bank vs. Philippine Business Bank | Security Bank vs. Globe Telecom |
| Converge Information vs. BDO Unibank | Converge Information vs. Transpacific Broadband Group | Converge Information vs. Atlas Consolidated Mining | Converge Information vs. Semirara Mining Corp |
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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