Correlation Between First Abacus and Benguet Corp

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

By analyzing existing cross correlation between First Abacus Financial and Benguet Corp A, you can compare the effects of market volatilities on First Abacus and Benguet Corp 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 First Abacus with a short position of Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Benguet Corp.

Diversification Opportunities for First Abacus and Benguet Corp

0.07

Correlation Coefficient

First Abacus  Benguet Corp

Significant diversification

The 3 months correlation between First and Benguet is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A and First Abacus 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 First Abacus Financial are associated (or correlated) with Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of First Abacus i.e., First Abacus and Benguet Corp go up and down completely randomly.

Pair Corralation between First Abacus and Benguet Corp

Assuming the 90 days trading horizon First Abacus is expected to generate 1.82 times less return on investment than Benguet Corp. In addition to that, First Abacus is 3.73 times more volatile than Benguet Corp A. It trades about 0.01 of its total potential returns per unit of risk. Benguet Corp A is currently generating about 0.06 per unit of volatility. If you would invest  420.00  in Benguet Corp A on April 23, 2025 and sell it today you would earn a total of  17.00  from holding Benguet Corp A or generate 4.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	29.79%
Values	Daily Returns

First Abacus Financial  vs.  Benguet Corp A

First Abacus Financial

Risk-Adjusted Performance

Very Weak

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

Benguet Corp A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Benguet Corp A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Benguet Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with First Abacus and Benguet Corp

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

The idea behind First Abacus Financial and Benguet Corp A 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.