Correlation Between Philex Mining and Cirtek Holdings

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

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

Diversification Opportunities for Philex Mining and Cirtek Holdings

-0.04

Correlation Coefficient

Philex Mining  Cirtek Holdings

Good diversification

The 3 months correlation between Philex and Cirtek is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining 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 Philex Mining 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 Philex Mining 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 Philex Mining i.e., Philex Mining and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Philex Mining and Cirtek Holdings

Assuming the 90 days trading horizon Philex Mining Corp is expected to generate 0.48 times more return on investment than Cirtek Holdings. However, Philex Mining Corp is 2.09 times less risky than Cirtek Holdings. It trades about 0.24 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about -0.02 per unit of risk. If you would invest  282.00  in Philex Mining Corp on October 18, 2024 and sell it today you would earn a total of  25.00  from holding Philex Mining Corp or generate 8.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Philex Mining Corp  vs.  Cirtek Holdings Philippines

Philex Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Philex Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm 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 Philex Mining and Cirtek Holdings

The main advantage of trading using opposite Philex Mining and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philex Mining 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 Philex Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.