Correlation Between THE PHILIPPINE and Asiabest Group
Can any of the company-specific risk be diversified away by investing in both THE PHILIPPINE and Asiabest Group 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 THE PHILIPPINE and Asiabest Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between THE PHILIPPINE STOCK and Asiabest Group International, you can compare the effects of market volatilities on THE PHILIPPINE and Asiabest Group 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 THE PHILIPPINE with a short position of Asiabest Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of THE PHILIPPINE and Asiabest Group.
Diversification Opportunities for THE PHILIPPINE and Asiabest Group
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between THE and Asiabest is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding THE PHILIPPINE STOCK and Asiabest Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiabest Group Inter and THE PHILIPPINE 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 THE PHILIPPINE STOCK are associated (or correlated) with Asiabest Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiabest Group Inter has no effect on the direction of THE PHILIPPINE i.e., THE PHILIPPINE and Asiabest Group go up and down completely randomly.
Pair Corralation between THE PHILIPPINE and Asiabest Group
Assuming the 90 days trading horizon THE PHILIPPINE STOCK is expected to under-perform the Asiabest Group. But the index apears to be less risky and, when comparing its historical volatility, THE PHILIPPINE STOCK is 8.19 times less risky than Asiabest Group. The index trades about -0.3 of its potential returns per unit of risk. The Asiabest Group International is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,900 in Asiabest Group International on September 23, 2024 and sell it today you would earn a total of 720.00 from holding Asiabest Group International or generate 37.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 54.55% |
Values | Daily Returns |
THE PHILIPPINE STOCK vs. Asiabest Group International
Performance |
Timeline |
THE PHILIPPINE and Asiabest Group Volatility Contrast
Predicted Return Density |
Returns |
THE PHILIPPINE STOCK
Pair trading matchups for THE PHILIPPINE
Asiabest Group International
Pair trading matchups for Asiabest Group
Pair Trading with THE PHILIPPINE and Asiabest Group
The main advantage of trading using opposite THE PHILIPPINE and Asiabest Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if THE PHILIPPINE position performs unexpectedly, Asiabest Group 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 Asiabest Group will offset losses from the drop in Asiabest Group's long position.THE PHILIPPINE vs. Globe Telecom | THE PHILIPPINE vs. Semirara Mining Corp | THE PHILIPPINE vs. Cebu Air Preferred | THE PHILIPPINE vs. Figaro Coffee Group |
Asiabest Group vs. SM Investments Corp | Asiabest Group vs. San Miguel Pure | Asiabest Group vs. Ayala Corp | Asiabest Group vs. Ayala Land |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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