Correlation Between Century Pacific and Bank of Commerce
Can any of the company-specific risk be diversified away by investing in both Century Pacific and Bank of Commerce 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 Century Pacific and Bank of Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Pacific Food and Bank of Commerce, you can compare the effects of market volatilities on Century Pacific and Bank of Commerce 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 Century Pacific with a short position of Bank of Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Pacific and Bank of Commerce.
Diversification Opportunities for Century Pacific and Bank of Commerce
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Bank is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Century Pacific Food and Bank of Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Commerce and Century Pacific 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 Century Pacific Food are associated (or correlated) with Bank of Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Commerce has no effect on the direction of Century Pacific i.e., Century Pacific and Bank of Commerce go up and down completely randomly.
Pair Corralation between Century Pacific and Bank of Commerce
Assuming the 90 days trading horizon Century Pacific Food is expected to generate 0.85 times more return on investment than Bank of Commerce. However, Century Pacific Food is 1.18 times less risky than Bank of Commerce. It trades about 0.09 of its potential returns per unit of risk. Bank of Commerce is currently generating about -0.17 per unit of risk. If you would invest 3,850 in Century Pacific Food on September 24, 2024 and sell it today you would earn a total of 350.00 from holding Century Pacific Food or generate 9.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 96.88% |
Values | Daily Returns |
Century Pacific Food vs. Bank of Commerce
Performance |
Timeline |
Century Pacific Food |
Bank of Commerce |
Century Pacific and Bank of Commerce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Century Pacific and Bank of Commerce
The main advantage of trading using opposite Century Pacific and Bank of Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Pacific position performs unexpectedly, Bank of Commerce 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 Bank of Commerce will offset losses from the drop in Bank of Commerce's long position.Century Pacific vs. Semirara Mining Corp | Century Pacific vs. Alliance Select Foods | Century Pacific vs. Apex Mining Co | Century Pacific vs. Figaro Coffee Group |
Bank of Commerce vs. Bank of the | Bank of Commerce vs. Easycall Communications Philippines | Bank of Commerce vs. VistaREIT | Bank of Commerce vs. Century Pacific Food |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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