Correlation Between Bank of the and Cirtek Holdings

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

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

Diversification Opportunities for Bank of the and Cirtek Holdings

0.18

Correlation Coefficient

Bank of the  Cirtek Holdings

Average diversification

The 3 months correlation between Bank and Cirtek is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and Cirtek Holdings Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirtek Holdings Phil and Bank of the 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 Bank of the are associated (or correlated) with Cirtek Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirtek Holdings Phil has no effect on the direction of Bank of the i.e., Bank of the and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Bank of the and Cirtek Holdings

Assuming the 90 days trading horizon Bank of the is expected to generate 0.14 times more return on investment than Cirtek Holdings. However, Bank of the is 6.94 times less risky than Cirtek Holdings. It trades about 0.04 of its potential returns per unit of risk. Cirtek Holdings Philippines is currently generating about 0.0 per unit of risk. If you would invest  9,873  in Bank of the on April 20, 2025 and sell it today you would earn a total of  2,327  from holding Bank of the or generate 23.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	42.26%
Values	Daily Returns

Bank of the  vs.  Cirtek Holdings Philippines

Bank of the

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bank of the has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Cirtek Holdings Phil

Risk-Adjusted Performance

Strong

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 weak fundamental drivers, Cirtek Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bank of the and Cirtek Holdings

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

The idea behind Bank of the and Cirtek Holdings 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.