Correlation Between First Abacus and Easycall Communications

Can any of the company-specific risk be diversified away by investing in both First Abacus and Easycall Communications 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 First Abacus and Easycall Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Abacus Financial and Easycall Communications Philippines, you can compare the effects of market volatilities on First Abacus and Easycall Communications 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 First Abacus with a short position of Easycall Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Easycall Communications.

Diversification Opportunities for First Abacus and Easycall Communications

0.11

Correlation Coefficient

First Abacus  Easycall Communications

Average diversification

The 3 months correlation between First and Easycall is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Easycall Communications Philip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easycall Communications and First Abacus 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 First Abacus Financial are associated (or correlated) with Easycall Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easycall Communications has no effect on the direction of First Abacus i.e., First Abacus and Easycall Communications go up and down completely randomly.

Pair Corralation between First Abacus and Easycall Communications

Assuming the 90 days trading horizon First Abacus is expected to generate 5.21 times less return on investment than Easycall Communications. But when comparing it to its historical volatility, First Abacus Financial is 1.95 times less risky than Easycall Communications. It trades about 0.04 of its potential returns per unit of risk. Easycall Communications Philippines is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Easycall Communications Philippines on September 21, 2024 and sell it today you would earn a total of  64.00  from holding Easycall Communications Philippines or generate 32.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	54.29%
Values	Daily Returns

First Abacus Financial  vs.  Easycall Communications Philip

First Abacus Financial

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Abacus Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, First Abacus exhibited solid returns over the last few months and may actually be approaching a breakup point.

Easycall Communications

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Easycall Communications Philippines are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Easycall Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Abacus and Easycall Communications

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

The idea behind First Abacus Financial and Easycall Communications 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.