Correlation Between Atok Big and Araneta Properties
Can any of the company-specific risk be diversified away by investing in both Atok Big and Araneta Properties 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 Atok Big and Araneta Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atok Big Wedge and Araneta Properties, you can compare the effects of market volatilities on Atok Big and Araneta Properties 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 Atok Big with a short position of Araneta Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atok Big and Araneta Properties.
Diversification Opportunities for Atok Big and Araneta Properties
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atok and Araneta is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Atok Big Wedge and Araneta Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Araneta Properties and Atok Big 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 Atok Big Wedge are associated (or correlated) with Araneta Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Araneta Properties has no effect on the direction of Atok Big i.e., Atok Big and Araneta Properties go up and down completely randomly.
Pair Corralation between Atok Big and Araneta Properties
Assuming the 90 days trading horizon Atok Big Wedge is expected to generate 2.05 times more return on investment than Araneta Properties. However, Atok Big is 2.05 times more volatile than Araneta Properties. It trades about 0.4 of its potential returns per unit of risk. Araneta Properties is currently generating about 0.25 per unit of risk. If you would invest 473.00 in Atok Big Wedge on October 21, 2024 and sell it today you would earn a total of 144.00 from holding Atok Big Wedge or generate 30.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Atok Big Wedge vs. Araneta Properties
Performance |
| Timeline |
| Atok Big Wedge |
| Araneta Properties |
Atok Big and Araneta Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atok Big and Araneta Properties
The main advantage of trading using opposite Atok Big and Araneta Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atok Big position performs unexpectedly, Araneta Properties 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 Araneta Properties will offset losses from the drop in Araneta Properties' long position.| Atok Big vs. Nickel Asia Corp | Atok Big vs. Philex Mining Corp | Atok Big vs. Atlas Consolidated Mining | Atok Big vs. Lepanto Consolidated Mining |
| Araneta Properties vs. Metropolitan Bank Trust | Araneta Properties vs. Crown Asia Chemicals | Araneta Properties vs. National Reinsurance | Araneta Properties vs. Prime Media Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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