Correlation Between Cirtek Holdings and Rizal Commercial

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

Diversification Opportunities for Cirtek Holdings and Rizal Commercial

0.75

Correlation Coefficient

Cirtek Holdings  Rizal Commercial

Poor diversification

The 3 months correlation between Cirtek and Rizal is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and Rizal Commercial Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rizal Commercial Banking 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 Rizal Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rizal Commercial Banking has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and Rizal Commercial go up and down completely randomly.

Pair Corralation between Cirtek Holdings and Rizal Commercial

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to generate 11.14 times more return on investment than Rizal Commercial. However, Cirtek Holdings is 11.14 times more volatile than Rizal Commercial Banking. It trades about 0.37 of its potential returns per unit of risk. Rizal Commercial Banking is currently generating about -0.02 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 Together
Strength	Significant
Accuracy	31.15%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  Rizal Commercial Banking

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.

Rizal Commercial Banking

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cirtek Holdings and Rizal Commercial

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

The idea behind Cirtek Holdings Philippines and Rizal Commercial Banking 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..