Correlation Between Concepcion Industrial and Cirtek Holdings

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

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

Diversification Opportunities for Concepcion Industrial and Cirtek Holdings

0.16

Correlation Coefficient

Concepcion Industrial  Cirtek Holdings

Average diversification

The 3 months correlation between Concepcion and Cirtek is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp 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 Concepcion Industrial 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 Concepcion Industrial Corp 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 Concepcion Industrial i.e., Concepcion Industrial and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Cirtek Holdings

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 0.29 times more return on investment than Cirtek Holdings. However, Concepcion Industrial Corp is 3.49 times less risky than Cirtek Holdings. It trades about -0.08 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.11 per unit of risk. If you would invest  1,370  in Concepcion Industrial Corp on October 10, 2024 and sell it today you would lose (22.00) from holding Concepcion Industrial Corp or give up 1.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Concepcion Industrial Corp  vs.  Cirtek Holdings Philippines

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concepcion Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Concepcion Industrial is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 relatively invariable fundamental drivers, Cirtek Holdings 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 Concepcion Industrial and Cirtek Holdings

The main advantage of trading using opposite Concepcion Industrial and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concepcion Industrial 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 Concepcion Industrial Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.