Correlation Between Concepcion Industrial and Manila Electric

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

By analyzing existing cross correlation between Concepcion Industrial Corp and Manila Electric Co, you can compare the effects of market volatilities on Concepcion Industrial and Manila Electric 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 Concepcion Industrial with a short position of Manila Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concepcion Industrial and Manila Electric.

Diversification Opportunities for Concepcion Industrial and Manila Electric

-0.51

Correlation Coefficient

Concepcion Industrial  Manila Electric

Excellent diversification

The 3 months correlation between Concepcion and Manila is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and Manila Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Electric and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with Manila Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Electric has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and Manila Electric go up and down completely randomly.

Pair Corralation between Concepcion Industrial and Manila Electric

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 1.08 times more return on investment than Manila Electric. However, Concepcion Industrial is 1.08 times more volatile than Manila Electric Co. It trades about 0.09 of its potential returns per unit of risk. Manila Electric Co is currently generating about -0.05 per unit of risk. If you would invest  1,362  in Concepcion Industrial Corp on April 23, 2025 and sell it today you would earn a total of  118.00  from holding Concepcion Industrial Corp or generate 8.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Concepcion Industrial Corp  vs.  Manila Electric Co

Concepcion Industrial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Concepcion Industrial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Concepcion Industrial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Manila Electric

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Concepcion Industrial and Manila Electric

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

The idea behind Concepcion Industrial Corp and Manila Electric Co 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.