Correlation Between Filinvest REIT and BDO Unibank

Can any of the company-specific risk be diversified away by investing in both Filinvest REIT and BDO Unibank 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 Filinvest REIT and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Filinvest REIT Corp and BDO Unibank, you can compare the effects of market volatilities on Filinvest REIT and BDO Unibank 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 Filinvest REIT with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filinvest REIT and BDO Unibank.

Diversification Opportunities for Filinvest REIT and BDO Unibank

0.41

Correlation Coefficient

Filinvest REIT  BDO Unibank

Very weak diversification

The 3 months correlation between Filinvest and BDO is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Filinvest REIT 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 Filinvest REIT Corp are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and BDO Unibank go up and down completely randomly.

Pair Corralation between Filinvest REIT and BDO Unibank

Assuming the 90 days trading horizon Filinvest REIT Corp is expected to under-perform the BDO Unibank. But the stock apears to be less risky and, when comparing its historical volatility, Filinvest REIT Corp is 1.92 times less risky than BDO Unibank. The stock trades about -0.29 of its potential returns per unit of risk. The BDO Unibank is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  15,071  in BDO Unibank on September 26, 2024 and sell it today you would lose (561.00) from holding BDO Unibank or give up 3.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Filinvest REIT Corp  vs.  BDO Unibank

Filinvest REIT Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Filinvest REIT Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Filinvest REIT is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

BDO Unibank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BDO Unibank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Filinvest REIT and BDO Unibank

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

The idea behind Filinvest REIT Corp and BDO Unibank 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.