Correlation Between Security Bank and PHINMA Corp
Can any of the company-specific risk be diversified away by investing in both Security Bank and PHINMA Corp 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 PHINMA Corp 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 PHINMA Corp, you can compare the effects of market volatilities on Security Bank and PHINMA Corp 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 PHINMA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and PHINMA Corp.
Diversification Opportunities for Security Bank and PHINMA Corp
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and PHINMA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and PHINMA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINMA 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 PHINMA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINMA Corp has no effect on the direction of Security Bank i.e., Security Bank and PHINMA Corp go up and down completely randomly.
Pair Corralation between Security Bank and PHINMA Corp
Assuming the 90 days trading horizon Security Bank is expected to generate 2.29 times less return on investment than PHINMA Corp. But when comparing it to its historical volatility, Security Bank Corp is 1.54 times less risky than PHINMA Corp. It trades about 0.02 of its potential returns per unit of risk. PHINMA Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,781 in PHINMA Corp on September 4, 2024 and sell it today you would earn a total of 199.00 from holding PHINMA Corp or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.04% |
| Values | Daily Returns |
Security Bank Corp vs. PHINMA Corp
Performance |
| Timeline |
| Security Bank Corp |
| PHINMA Corp |
Security Bank and PHINMA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and PHINMA Corp
The main advantage of trading using opposite Security Bank and PHINMA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, PHINMA Corp 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 PHINMA Corp will offset losses from the drop in PHINMA Corp's long position.| Security Bank vs. Philippine Savings Bank | Security Bank vs. Figaro Coffee Group | Security Bank vs. Converge Information Communications | Security Bank vs. Metropolitan Bank Trust |
| PHINMA Corp vs. SM Investments Corp | PHINMA Corp vs. San Miguel Pure | PHINMA Corp vs. Ayala Corp | PHINMA Corp vs. Ayala Land |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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