Correlation Between Security Bank and Globe Telecom
Can any of the company-specific risk be diversified away by investing in both Security Bank and Globe Telecom 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 Globe Telecom 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 Globe Telecom, you can compare the effects of market volatilities on Security Bank and Globe Telecom 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 Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Globe Telecom.
Diversification Opportunities for Security Bank and Globe Telecom
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Security and Globe is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom 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 Globe Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Telecom has no effect on the direction of Security Bank i.e., Security Bank and Globe Telecom go up and down completely randomly.
Pair Corralation between Security Bank and Globe Telecom
Assuming the 90 days trading horizon Security Bank is expected to generate 2.61 times less return on investment than Globe Telecom. In addition to that, Security Bank is 1.42 times more volatile than Globe Telecom. It trades about 0.02 of its total potential returns per unit of risk. Globe Telecom is currently generating about 0.08 per unit of volatility. If you would invest 187,662 in Globe Telecom on November 28, 2024 and sell it today you would earn a total of 39,938 from holding Globe Telecom or generate 21.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. Globe Telecom
Performance |
| Timeline |
| Security Bank Corp |
| Globe Telecom |
Security Bank and Globe Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Globe Telecom
The main advantage of trading using opposite Security Bank and Globe Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Globe Telecom 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 Globe Telecom will offset losses from the drop in Globe Telecom's long position.| Security Bank vs. Asia United Bank | Security Bank vs. Philippine Business Bank | Security Bank vs. Cebu Air Preferred | Security Bank vs. Atlas Consolidated Mining |
| Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. COL Financial Group | Globe Telecom vs. Century Pacific Food | Globe Telecom vs. Bank of the |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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