Correlation Between Cebu Air and 302635AH0

Can any of the company-specific risk be diversified away by investing in both Cebu Air and 302635AH0 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 302635AH0 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 FSK 2625 15 JAN 27, you can compare the effects of market volatilities on Cebu Air and 302635AH0 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 302635AH0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and 302635AH0.

Diversification Opportunities for Cebu Air and 302635AH0

-0.73

Correlation Coefficient

Cebu Air  302635AH0

Pay attention - limited upside

The 3 months correlation between Cebu and 302635AH0 is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and FSK 2625 15 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSK 2625 15 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 302635AH0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSK 2625 15 has no effect on the direction of Cebu Air i.e., Cebu Air and 302635AH0 go up and down completely randomly.

Pair Corralation between Cebu Air and 302635AH0

Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the 302635AH0. In addition to that, Cebu Air is 1.2 times more volatile than FSK 2625 15 JAN 27. It trades about -0.09 of its total potential returns per unit of risk. FSK 2625 15 JAN 27 is currently generating about -0.02 per unit of volatility. If you would invest  9,120  in FSK 2625 15 JAN 27 on October 8, 2024 and sell it today you would lose (290.00) from holding FSK 2625 15 JAN 27 or give up 3.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.61%
Values	Daily Returns

Cebu Air ADR  vs.  FSK 2625 15 JAN 27

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 weak 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.

FSK 2625 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FSK 2625 15 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FSK 2625 15 JAN 27 investors.

Pair Trading with Cebu Air and 302635AH0

The main advantage of trading using opposite Cebu Air and 302635AH0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, 302635AH0 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 302635AH0 will offset losses from the drop in 302635AH0's long position.

The idea behind Cebu Air ADR and FSK 2625 15 JAN 27 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.

Check out your portfolio center.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.