Correlation Between Converge Information and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Converge Information and Cebu Air 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 Converge Information and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and Cebu Air Preferred, you can compare the effects of market volatilities on Converge Information and Cebu Air 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 Converge Information with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Cebu Air.
Diversification Opportunities for Converge Information and Cebu Air
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Converge and Cebu is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Cebu Air Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air Preferred and Converge Information 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 Converge Information Communications are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air Preferred has no effect on the direction of Converge Information i.e., Converge Information and Cebu Air go up and down completely randomly.
Pair Corralation between Converge Information and Cebu Air
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 1.59 times more return on investment than Cebu Air. However, Converge Information is 1.59 times more volatile than Cebu Air Preferred. It trades about 0.12 of its potential returns per unit of risk. Cebu Air Preferred is currently generating about 0.06 per unit of risk. If you would invest 792.00 in Converge Information Communications on September 14, 2024 and sell it today you would earn a total of 858.00 from holding Converge Information Communications or generate 108.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 88.93% |
Values | Daily Returns |
Converge Information Communica vs. Cebu Air Preferred
Performance |
Timeline |
Converge Information |
Cebu Air Preferred |
Converge Information and Cebu Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Converge Information and Cebu Air
The main advantage of trading using opposite Converge Information and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.Converge Information vs. Megawide Construction Corp | Converge Information vs. Top Frontier Investment | Converge Information vs. Concepcion Industrial Corp | Converge Information vs. National Reinsurance |
Cebu Air vs. Dizon Copper Silver | Cebu Air vs. GT Capital Holdings | Cebu Air vs. Allhome Corp | Cebu Air vs. Jollibee Foods Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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