Correlation Between Cirtek Holdings and Liberty Flour

Can any of the company-specific risk be diversified away by investing in both Cirtek Holdings and Liberty Flour 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 Liberty Flour 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 Liberty Flour Mills, you can compare the effects of market volatilities on Cirtek Holdings and Liberty Flour 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 Liberty Flour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cirtek Holdings and Liberty Flour.

Diversification Opportunities for Cirtek Holdings and Liberty Flour

-0.83

Correlation Coefficient

Cirtek Holdings  Liberty Flour

Pay attention - limited upside

The 3 months correlation between Cirtek and Liberty is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Liberty Flour Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Flour Mills 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 Liberty Flour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Flour Mills has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Liberty Flour go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Liberty Flour

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to generate 3.69 times more return on investment than Liberty Flour. However, Cirtek Holdings is 3.69 times more volatile than Liberty Flour Mills. It trades about 0.36 of its potential returns per unit of risk. Liberty Flour Mills is currently generating about 0.17 per unit of risk. If you would invest  3.73  in Cirtek Holdings Philippines on April 20, 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	Significant
Accuracy	33.9%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Liberty Flour Mills

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

Liberty Flour Mills

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty Flour Mills are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Liberty Flour exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cirtek Holdings and Liberty Flour

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

The idea behind Cirtek Holdings Philippines and Liberty Flour Mills 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.