Correlation Between BDO Unibank and Bank of the

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

By analyzing existing cross correlation between BDO Unibank and Bank of the, you can compare the effects of market volatilities on BDO Unibank and Bank of the 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 BDO Unibank with a short position of Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of BDO Unibank and Bank of the.

Diversification Opportunities for BDO Unibank and Bank of the

0.41

Correlation Coefficient

BDO Unibank  Bank of the

Very weak diversification

The 3 months correlation between BDO and Bank is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BDO Unibank and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the and BDO Unibank 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 BDO Unibank are associated (or correlated) with Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of BDO Unibank i.e., BDO Unibank and Bank of the go up and down completely randomly.

Pair Corralation between BDO Unibank and Bank of the

Assuming the 90 days trading horizon BDO Unibank is expected to under-perform the Bank of the. In addition to that, BDO Unibank is 1.04 times more volatile than Bank of the. It trades about 0.0 of its total potential returns per unit of risk. Bank of the is currently generating about 0.06 per unit of volatility. If you would invest  13,003  in Bank of the on March 24, 2025 and sell it today you would earn a total of  687.00  from holding Bank of the or generate 5.28% return on investment over 90 days.

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

BDO Unibank  vs.  Bank of the

BDO Unibank

Risk-Adjusted Performance

Very Weak

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

Bank of the

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of the are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Bank of the may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with BDO Unibank and Bank of the

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

The idea behind BDO Unibank and Bank of the 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.