Correlation Between Semirara Mining and Aboitiz Equity

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

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

Diversification Opportunities for Semirara Mining and Aboitiz Equity

-0.01

Correlation Coefficient

Semirara Mining  Aboitiz Equity

Good diversification

The 3 months correlation between Semirara and Aboitiz is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Semirara Mining Corp and Aboitiz Equity Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Equity Ventures and Semirara 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 Semirara Mining Corp are associated (or correlated) with Aboitiz Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Equity Ventures has no effect on the direction of Semirara Mining i.e., Semirara Mining and Aboitiz Equity go up and down completely randomly.

Pair Corralation between Semirara Mining and Aboitiz Equity

Assuming the 90 days trading horizon Semirara Mining Corp is expected to generate 0.69 times more return on investment than Aboitiz Equity. However, Semirara Mining Corp is 1.45 times less risky than Aboitiz Equity. It trades about 0.07 of its potential returns per unit of risk. Aboitiz Equity Ventures is currently generating about -0.03 per unit of risk. If you would invest  2,233  in Semirara Mining Corp on October 15, 2024 and sell it today you would earn a total of  1,242  from holding Semirara Mining Corp or generate 55.62% return on investment over 90 days.

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

Semirara Mining Corp  vs.  Aboitiz Equity Ventures

Semirara Mining Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semirara Mining Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Semirara Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aboitiz Equity Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aboitiz Equity Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Aboitiz Equity is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Semirara Mining and Aboitiz Equity

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

The idea behind Semirara Mining Corp and Aboitiz Equity Ventures 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.