Correlation Between BDO Unibank and Vista Land

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

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

Diversification Opportunities for BDO Unibank and Vista Land

0.03

Correlation Coefficient

BDO Unibank  Vista Land

Significant diversification

The 3 months correlation between BDO and Vista is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and Vista Land Lifescapes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Land Lifescapes and BDO Unibank 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 BDO Unibank are associated (or correlated) with Vista Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Land Lifescapes has no effect on the direction of BDO Unibank i.e., BDO Unibank and Vista Land go up and down completely randomly.

Pair Corralation between BDO Unibank and Vista Land

Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the Vista Land. In addition to that, BDO Unibank is 1.37 times more volatile than Vista Land Lifescapes. It trades about -0.13 of its total potential returns per unit of risk. Vista Land Lifescapes is currently generating about -0.01 per unit of volatility. If you would invest  10,290  in Vista Land Lifescapes on October 10, 2024 and sell it today you would lose (40.00) from holding Vista Land Lifescapes or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.33%
Values	Daily Returns

BDO Unibank  vs.  Vista Land Lifescapes

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.

Vista Land Lifescapes

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Land Lifescapes are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Vista Land is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BDO Unibank and Vista Land

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

The idea behind BDO Unibank and Vista Land Lifescapes 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.