Correlation Between Converge Information and Cirtek Holdings

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

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

Diversification Opportunities for Converge Information and Cirtek Holdings

-0.01

Correlation Coefficient

Converge Information  Cirtek Holdings

Good diversification

The 3 months correlation between Converge and Cirtek is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica 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 Converge Information 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 Converge Information Communications 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 Converge Information i.e., Converge Information and Cirtek Holdings go up and down completely randomly.

Pair Corralation between Converge Information and Cirtek Holdings

Assuming the 90 days trading horizon Converge Information Communications is expected to under-perform the Cirtek Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Converge Information Communications is 7.51 times less risky than Cirtek Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Cirtek Holdings Philippines is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  3.73  in Cirtek Holdings Philippines on April 24, 2025 and sell it today you would earn a total of  4.27  from holding Cirtek Holdings Philippines or generate 114.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.15%
Values	Daily Returns

Converge Information Communica  vs.  Cirtek Holdings Philippines

Converge Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Converge Information Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Converge Information is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Cirtek Holdings Phil

Risk-Adjusted Performance

Solid

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 Converge Information and Cirtek Holdings

The main advantage of trading using opposite Converge Information and Cirtek Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information 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 Converge Information Communications 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.

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.