Correlation Between Cirtek Holdings and Converge Information
Can any of the company-specific risk be diversified away by investing in both Cirtek Holdings and Converge Information 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 Converge Information 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 Converge Information Communications, you can compare the effects of market volatilities on Cirtek Holdings and Converge Information 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 Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirtek Holdings and Converge Information.
Diversification Opportunities for Cirtek Holdings and Converge Information
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cirtek and Converge is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information 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 Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Converge Information go up and down completely randomly.
Pair Corralation between Cirtek Holdings and Converge Information
Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to under-perform the Converge Information. In addition to that, Cirtek Holdings is 4.31 times more volatile than Converge Information Communications. It trades about -0.02 of its total potential returns per unit of risk. Converge Information Communications is currently generating about 0.01 per unit of volatility. If you would invest 1,642 in Converge Information Communications on September 24, 2024 and sell it today you would lose (4.00) from holding Converge Information Communications or give up 0.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 32.31% |
Values | Daily Returns |
Cirtek Holdings Philippines vs. Converge Information Communica
Performance |
Timeline |
Cirtek Holdings Phil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Converge Information |
Cirtek Holdings and Converge Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cirtek Holdings and Converge Information
The main advantage of trading using opposite Cirtek Holdings and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cirtek Holdings position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.Cirtek Holdings vs. Converge Information Communications | Cirtek Holdings vs. Apex Mining Co | Cirtek Holdings vs. SM Investments Corp | Cirtek Holdings vs. Globe Telecom |
Converge Information vs. Transpacific Broadband Group | Converge Information vs. VistaREIT | Converge Information vs. Philippine National Bank | Converge Information vs. Metro Retail Stores |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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