Correlation Between Allhome Corp and Security Bank
Can any of the company-specific risk be diversified away by investing in both Allhome Corp and Security Bank 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 Allhome Corp and Security Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and Security Bank Corp, you can compare the effects of market volatilities on Allhome Corp and Security Bank 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 Allhome Corp with a short position of Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and Security Bank.
Diversification Opportunities for Allhome Corp and Security Bank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allhome and Security is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank Corp and Allhome Corp 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 Allhome Corp are associated (or correlated) with Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Allhome Corp i.e., Allhome Corp and Security Bank go up and down completely randomly.
Pair Corralation between Allhome Corp and Security Bank
Assuming the 90 days trading horizon Allhome Corp is expected to generate 4.79 times less return on investment than Security Bank. But when comparing it to its historical volatility, Allhome Corp is 1.03 times less risky than Security Bank. It trades about 0.01 of its potential returns per unit of risk. Security Bank Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,057 in Security Bank Corp on September 18, 2024 and sell it today you would earn a total of 573.00 from holding Security Bank Corp or generate 7.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Allhome Corp vs. Security Bank Corp
Performance |
Timeline |
Allhome Corp |
Security Bank Corp |
Allhome Corp and Security Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allhome Corp and Security Bank
The main advantage of trading using opposite Allhome Corp and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.Allhome Corp vs. Dizon Copper Silver | Allhome Corp vs. GT Capital Holdings | Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp |
Security Bank vs. Transpacific Broadband Group | Security Bank vs. Apex Mining Co | Security Bank vs. Concepcion Industrial Corp | Security Bank vs. Rizal Commercial Banking |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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