Correlation Between Philex Mining and Cebu Air

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

By analyzing existing cross correlation between Philex Mining Corp and Cebu Air, you can compare the effects of market volatilities on Philex Mining and Cebu Air 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 Philex Mining with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philex Mining and Cebu Air.

Diversification Opportunities for Philex Mining and Cebu Air

-0.44

Correlation Coefficient

Philex Mining  Cebu Air

Very good diversification

The 3 months correlation between Philex and Cebu is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Philex Mining Corp and Cebu Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air and Philex Mining 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 Philex Mining Corp are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air has no effect on the direction of Philex Mining i.e., Philex Mining and Cebu Air go up and down completely randomly.

Pair Corralation between Philex Mining and Cebu Air

Assuming the 90 days trading horizon Philex Mining Corp is expected to under-perform the Cebu Air. In addition to that, Philex Mining is 3.65 times more volatile than Cebu Air. It trades about -0.07 of its total potential returns per unit of risk. Cebu Air is currently generating about 0.16 per unit of volatility. If you would invest  3,400  in Cebu Air on April 20, 2025 and sell it today you would earn a total of  290.00  from holding Cebu Air or generate 8.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Philex Mining Corp  vs.  Cebu Air

Philex Mining Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Philex Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cebu Air

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cebu Air are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Cebu Air may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Philex Mining and Cebu Air

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

The idea behind Philex Mining Corp and Cebu Air 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.