Correlation Between Bright Kindle and Cirtek Holdings

Can any of the company-specific risk be diversified away by investing in both Bright Kindle and Cirtek Holdings 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 Bright Kindle and Cirtek Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bright Kindle Resources and Cirtek Holdings Philippines, you can compare the effects of market volatilities on Bright Kindle and Cirtek Holdings 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 Bright Kindle with a short position of Cirtek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Kindle and Cirtek Holdings.

Diversification Opportunities for Bright Kindle and Cirtek Holdings

-0.62

Correlation Coefficient

Bright Kindle  Cirtek Holdings

Excellent diversification

The 3 months correlation between Bright and Cirtek is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bright Kindle Resources and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil and Bright Kindle 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 Bright Kindle Resources are associated (or correlated) with Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Bright Kindle i.e., Bright Kindle and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Bright Kindle and Cirtek Holdings

Assuming the 90 days trading horizon Bright Kindle Resources is expected to generate 2.93 times more return on investment than Cirtek Holdings. However, Bright Kindle is 2.93 times more volatile than Cirtek Holdings Philippines. It trades about 0.02 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.03 per unit of risk. If you would invest  110.00  in Bright Kindle Resources on September 28, 2024 and sell it today you would lose (11.00) from holding Bright Kindle Resources or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	71.94%
Values	Daily Returns

Bright Kindle Resources  vs.  Cirtek Holdings Philippines

Bright Kindle Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Kindle Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Bright Kindle exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cirtek Holdings Phil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirtek Holdings Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bright Kindle and Cirtek Holdings

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

The idea behind Bright Kindle Resources and Cirtek Holdings Philippines 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.