Correlation Between Cebu Air and 126408GW7

Can any of the company-specific risk be diversified away by investing in both Cebu Air and 126408GW7 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 126408GW7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cebu Air ADR and CSX P 475, you can compare the effects of market volatilities on Cebu Air and 126408GW7 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 126408GW7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and 126408GW7.

Diversification Opportunities for Cebu Air and 126408GW7

0.0

Correlation Coefficient

Cebu Air  126408GW7

Pay attention - limited upside

The 3 months correlation between Cebu and 126408GW7 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and CSX P 475 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 475 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 ADR are associated (or correlated) with 126408GW7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 475 has no effect on the direction of Cebu Air i.e., Cebu Air and 126408GW7 go up and down completely randomly.

Pair Corralation between Cebu Air and 126408GW7

If you would invest (100.00) in CSX P 475 on October 13, 2024 and sell it today you would earn a total of  100.00  from holding CSX P 475 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cebu Air ADR  vs.  CSX P 475

Cebu Air ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cebu Air ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CSX P 475

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSX P 475 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126408GW7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cebu Air and 126408GW7

The main advantage of trading using opposite Cebu Air and 126408GW7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, 126408GW7 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 126408GW7 will offset losses from the drop in 126408GW7's long position.

The idea behind Cebu Air ADR and CSX P 475 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.