Correlation Between Cirtek Holdings and Bank of Commerce

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

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

Diversification Opportunities for Cirtek Holdings and Bank of Commerce

-0.59

Correlation Coefficient

Cirtek Holdings  Bank of Commerce

Excellent diversification

The 3 months correlation between Cirtek and Bank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Bank of Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Commerce and Cirtek Holdings 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 Cirtek Holdings Philippines are associated (or correlated) with Bank of Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Commerce has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Bank of Commerce go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Bank of Commerce

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to generate 8.65 times more return on investment than Bank of Commerce. However, Cirtek Holdings is 8.65 times more volatile than Bank of Commerce. It trades about 0.37 of its potential returns per unit of risk. Bank of Commerce is currently generating about 0.03 per unit of risk. If you would invest  3.73  in Cirtek Holdings Philippines on April 22, 2025 and sell it today you would earn a total of  5.27  from holding Cirtek Holdings Philippines or generate 141.29% return on investment over 90 days.

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

Cirtek Holdings Philippines  vs.  Bank of Commerce

Cirtek Holdings Phil

Risk-Adjusted Performance

Strong

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 uncertain fundamental drivers, Cirtek Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Bank of Commerce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bank of Commerce are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Bank of Commerce is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cirtek Holdings and Bank of Commerce

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

The idea behind Cirtek Holdings Philippines and Bank of Commerce 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.