Correlation Between Ayala Corp and Bright Kindle
Can any of the company-specific risk be diversified away by investing in both Ayala Corp and Bright Kindle 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 Ayala Corp and Bright Kindle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala Corp and Bright Kindle Resources, you can compare the effects of market volatilities on Ayala Corp and Bright Kindle 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 Ayala Corp with a short position of Bright Kindle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala Corp and Bright Kindle.
Diversification Opportunities for Ayala Corp and Bright Kindle
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ayala and Bright is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Corp and Bright Kindle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Kindle Resources and Ayala Corp 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 Ayala Corp are associated (or correlated) with Bright Kindle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Kindle Resources has no effect on the direction of Ayala Corp i.e., Ayala Corp and Bright Kindle go up and down completely randomly.
Pair Corralation between Ayala Corp and Bright Kindle
Assuming the 90 days trading horizon Ayala Corp is expected to under-perform the Bright Kindle. But the stock apears to be less risky and, when comparing its historical volatility, Ayala Corp is 4.5 times less risky than Bright Kindle. The stock trades about -0.06 of its potential returns per unit of risk. The Bright Kindle Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Bright Kindle Resources on November 9, 2024 and sell it today you would earn a total of 14.00 from holding Bright Kindle Resources or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ayala Corp vs. Bright Kindle Resources
Performance |
| Timeline |
| Ayala Corp |
| Bright Kindle Resources |
Ayala Corp and Bright Kindle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala Corp and Bright Kindle
The main advantage of trading using opposite Ayala Corp and Bright Kindle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Corp position performs unexpectedly, Bright Kindle 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 Bright Kindle will offset losses from the drop in Bright Kindle's long position.| Ayala Corp vs. Security Bank Corp | Ayala Corp vs. Semirara Mining Corp | Ayala Corp vs. BDO Unibank | Ayala Corp vs. Converge Information Communications |
| Bright Kindle vs. Philex Mining Corp | Bright Kindle vs. Top Frontier Investment | Bright Kindle vs. Converge Information Communications | Bright Kindle vs. Concepcion Industrial Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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