Correlation Between Cirtek Holdings and Philex Mining

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

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

Diversification Opportunities for Cirtek Holdings and Philex Mining

-0.06

Correlation Coefficient

Cirtek Holdings  Philex Mining

Good diversification

The 3 months correlation between Cirtek and Philex is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp and Cirtek Holdings 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 Cirtek Holdings Philippines are associated (or correlated) with Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Philex Mining go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Philex Mining

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to under-perform the Philex Mining. But the stock apears to be less risky and, when comparing its historical volatility, Cirtek Holdings Philippines is 1.31 times less risky than Philex Mining. The stock trades about -0.02 of its potential returns per unit of risk. The Philex Mining Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  306.00  in Philex Mining Corp on September 29, 2024 and sell it today you would lose (27.00) from holding Philex Mining Corp or give up 8.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.01%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Philex Mining Corp

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.

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 uncertain 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.

Pair Trading with Cirtek Holdings and Philex Mining

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

The idea behind Cirtek Holdings Philippines and Philex Mining Corp 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.