Correlation Between Cebu Air and Semirara Mining

Can any of the company-specific risk be diversified away by investing in both Cebu Air and Semirara Mining 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 Cebu Air and Semirara Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cebu Air Preferred and Semirara Mining Corp, you can compare the effects of market volatilities on Cebu Air and Semirara Mining 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 Cebu Air with a short position of Semirara Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Semirara Mining.

Diversification Opportunities for Cebu Air and Semirara Mining

-0.6

Correlation Coefficient

Cebu Air  Semirara Mining

Excellent diversification

The 3 months correlation between Cebu and Semirara is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air Preferred and Semirara Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semirara Mining Corp and Cebu Air 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 Cebu Air Preferred are associated (or correlated) with Semirara Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semirara Mining Corp has no effect on the direction of Cebu Air i.e., Cebu Air and Semirara Mining go up and down completely randomly.

Pair Corralation between Cebu Air and Semirara Mining

Assuming the 90 days trading horizon Cebu Air is expected to generate 9.08 times less return on investment than Semirara Mining. In addition to that, Cebu Air is 1.24 times more volatile than Semirara Mining Corp. It trades about 0.01 of its total potential returns per unit of risk. Semirara Mining Corp is currently generating about 0.1 per unit of volatility. If you would invest  2,696  in Semirara Mining Corp on October 7, 2024 and sell it today you would earn a total of  789.00  from holding Semirara Mining Corp or generate 29.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.09%
Values	Daily Returns

Cebu Air Preferred  vs.  Semirara Mining Corp

Cebu Air Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cebu Air Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Semirara Mining Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semirara Mining Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Semirara Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cebu Air and Semirara Mining

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

The idea behind Cebu Air Preferred and Semirara Mining Corp 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 .