Correlation Between Megawide Construction and Philex Mining
Can any of the company-specific risk be diversified away by investing in both Megawide Construction and Philex Mining 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 Megawide Construction and Philex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Megawide Construction Corp and Philex Mining Corp, you can compare the effects of market volatilities on Megawide Construction and Philex Mining 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 Megawide Construction with a short position of Philex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megawide Construction and Philex Mining.
Diversification Opportunities for Megawide Construction and Philex Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Megawide and Philex is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Megawide Construction Corp and Philex Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philex Mining Corp and Megawide Construction 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 Megawide Construction Corp are associated (or correlated) with Philex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philex Mining Corp has no effect on the direction of Megawide Construction i.e., Megawide Construction and Philex Mining go up and down completely randomly.
Pair Corralation between Megawide Construction and Philex Mining
Assuming the 90 days trading horizon Megawide Construction is expected to generate 1.2 times less return on investment than Philex Mining. But when comparing it to its historical volatility, Megawide Construction Corp is 1.93 times less risky than Philex Mining. It trades about 0.13 of its potential returns per unit of risk. Philex Mining Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Philex Mining Corp on March 26, 2025 and sell it today you would earn a total of 409.00 from holding Philex Mining Corp or generate 151.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 7.11% |
| Values | Daily Returns |
Megawide Construction Corp vs. Philex Mining Corp
Performance |
| Timeline |
| Megawide Construction |
| Philex Mining Corp |
Megawide Construction and Philex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megawide Construction and Philex Mining
The main advantage of trading using opposite Megawide Construction and Philex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megawide Construction position performs unexpectedly, Philex Mining 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 Philex Mining will offset losses from the drop in Philex Mining's long position.| Megawide Construction vs. East West Banking | Megawide Construction vs. Security Bank Corp | Megawide Construction vs. Rizal Commercial Banking | Megawide Construction vs. Metropolitan Bank Trust |
| Philex Mining vs. Suntrust Home Developers | Philex Mining vs. Semirara Mining Corp | Philex Mining vs. Philippine Savings Bank | Philex Mining vs. East West Banking |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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