Correlation Between Axelum Resources and BDO Unibank

Can any of the company-specific risk be diversified away by investing in both Axelum Resources and BDO Unibank 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 Axelum Resources and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Axelum Resources Corp and BDO Unibank, you can compare the effects of market volatilities on Axelum Resources and BDO Unibank 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 Axelum Resources with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axelum Resources and BDO Unibank.

Diversification Opportunities for Axelum Resources and BDO Unibank

0.34

Correlation Coefficient

Axelum Resources  BDO Unibank

Weak diversification

The 3 months correlation between Axelum and BDO is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Axelum Resources Corp and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Axelum Resources 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 Axelum Resources Corp are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank has no effect on the direction of Axelum Resources i.e., Axelum Resources and BDO Unibank go up and down completely randomly.

Pair Corralation between Axelum Resources and BDO Unibank

Assuming the 90 days trading horizon Axelum Resources Corp is expected to generate 2.98 times more return on investment than BDO Unibank. However, Axelum Resources is 2.98 times more volatile than BDO Unibank. It trades about 0.02 of its potential returns per unit of risk. BDO Unibank is currently generating about -0.04 per unit of risk. If you would invest  219.00  in Axelum Resources Corp on October 11, 2024 and sell it today you would lose (1.00) from holding Axelum Resources Corp or give up 0.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.38%
Values	Daily Returns

Axelum Resources Corp  vs.  BDO Unibank

Axelum Resources Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axelum Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Axelum Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BDO Unibank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BDO Unibank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BDO Unibank is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Axelum Resources and BDO Unibank

The main advantage of trading using opposite Axelum Resources and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axelum Resources position performs unexpectedly, BDO Unibank 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 BDO Unibank will offset losses from the drop in BDO Unibank's long position.

The idea behind Axelum Resources Corp and BDO Unibank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .