Correlation Between Transpacific Broadband and Globe Telecom
Can any of the company-specific risk be diversified away by investing in both Transpacific Broadband 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 Transpacific Broadband and Globe Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transpacific Broadband Group and Globe Telecom, you can compare the effects of market volatilities on Transpacific Broadband 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 Transpacific Broadband with a short position of Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transpacific Broadband and Globe Telecom.
Diversification Opportunities for Transpacific Broadband and Globe Telecom
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transpacific and Globe is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Transpacific Broadband Group and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom and Transpacific Broadband 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 Transpacific Broadband Group 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 Transpacific Broadband i.e., Transpacific Broadband and Globe Telecom go up and down completely randomly.
Pair Corralation between Transpacific Broadband and Globe Telecom
Assuming the 90 days trading horizon Transpacific Broadband Group is expected to generate 1.99 times more return on investment than Globe Telecom. However, Transpacific Broadband is 1.99 times more volatile than Globe Telecom. It trades about 0.02 of its potential returns per unit of risk. Globe Telecom is currently generating about -0.03 per unit of risk. If you would invest 13.00 in Transpacific Broadband Group on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Transpacific Broadband Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.06% |
| Values | Daily Returns |
Transpacific Broadband Group vs. Globe Telecom
Performance |
| Timeline |
| Transpacific Broadband |
| Globe Telecom |
Transpacific Broadband and Globe Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transpacific Broadband and Globe Telecom
The main advantage of trading using opposite Transpacific Broadband and Globe Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transpacific Broadband 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.| Transpacific Broadband vs. Top Frontier Investment | Transpacific Broadband vs. Metro Retail Stores | Transpacific Broadband vs. Cebu Air Preferred | Transpacific Broadband vs. Atlas Consolidated Mining |
| Globe Telecom vs. Prime Media Holdings | Globe Telecom vs. Concepcion Industrial Corp | Globe Telecom vs. STI Education Systems | Globe Telecom 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |