Correlation Between CHUBB and Cebu Air
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By analyzing existing cross correlation between CHUBB P 6 and Cebu Air ADR, you can compare the effects of market volatilities on CHUBB and Cebu Air 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 CHUBB with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHUBB and Cebu Air.
Diversification Opportunities for CHUBB and Cebu Air
Poor diversification
The 3 months correlation between CHUBB and Cebu is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CHUBB P 6 and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR and CHUBB 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 CHUBB P 6 are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of CHUBB i.e., CHUBB and Cebu Air go up and down completely randomly.
Pair Corralation between CHUBB and Cebu Air
Assuming the 90 days trading horizon CHUBB is expected to generate 4.44 times less return on investment than Cebu Air. But when comparing it to its historical volatility, CHUBB P 6 is 5.44 times less risky than Cebu Air. It trades about 0.07 of its potential returns per unit of risk. Cebu Air ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Cebu Air ADR on September 13, 2024 and sell it today you would earn a total of 35.00 from holding Cebu Air ADR or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.8% |
| Values | Daily Returns |
CHUBB P 6 vs. Cebu Air ADR
Performance |
| Timeline |
| CHUBB P 6 |
| Cebu Air ADR |
CHUBB and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHUBB and Cebu Air
The main advantage of trading using opposite CHUBB and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHUBB position performs unexpectedly, Cebu Air 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 Air will offset losses from the drop in Cebu Air's long position.| CHUBB vs. Cebu Air ADR | CHUBB vs. Alaska Air Group | CHUBB vs. Aldel Financial II | CHUBB vs. Mesa Air Group |
| Cebu Air vs. Finnair Oyj | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air New Zealand |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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