Correlation Between Philippine Business and Concepcion Industrial

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

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

Diversification Opportunities for Philippine Business and Concepcion Industrial

0.09

Correlation Coefficient

Philippine Business  Concepcion Industrial

Significant diversification

The 3 months correlation between Philippine and Concepcion is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Business Bank and Concepcion Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concepcion Industrial and Philippine Business 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 Philippine Business Bank are associated (or correlated) with Concepcion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concepcion Industrial has no effect on the direction of Philippine Business i.e., Philippine Business and Concepcion Industrial go up and down completely randomly.

Pair Corralation between Philippine Business and Concepcion Industrial

Assuming the 90 days trading horizon Philippine Business Bank is expected to generate 1.44 times more return on investment than Concepcion Industrial. However, Philippine Business is 1.44 times more volatile than Concepcion Industrial Corp. It trades about 0.12 of its potential returns per unit of risk. Concepcion Industrial Corp is currently generating about 0.09 per unit of risk. If you would invest  754.00  in Philippine Business Bank on April 23, 2025 and sell it today you would earn a total of  117.00  from holding Philippine Business Bank or generate 15.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Philippine Business Bank  vs.  Concepcion Industrial Corp

Philippine Business Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Philippine Business Bank are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Philippine Business exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Philippine Business and Concepcion Industrial

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

The idea behind Philippine Business Bank and Concepcion Industrial Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.