Correlation Between Ayala Corp and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Ayala Corp and Manila 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 Ayala Corp and Manila Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala Corp and Manila Mining Corp, you can compare the effects of market volatilities on Ayala Corp and Manila 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 Ayala Corp with a short position of Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala Corp and Manila Mining.
Diversification Opportunities for Ayala Corp and Manila Mining
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ayala and Manila is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Corp and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Ayala Corp i.e., Ayala Corp and Manila Mining go up and down completely randomly.
Pair Corralation between Ayala Corp and Manila Mining
Assuming the 90 days trading horizon Ayala Corp is expected to generate 0.43 times more return on investment than Manila Mining. However, Ayala Corp is 2.32 times less risky than Manila Mining. It trades about 0.03 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.09 per unit of risk. If you would invest 59,060 in Ayala Corp on August 29, 2024 and sell it today you would earn a total of 2,890 from holding Ayala Corp or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 56.1% |
| Values | Daily Returns |
Ayala Corp vs. Manila Mining Corp
Performance |
| Timeline |
| Ayala Corp |
| Manila Mining Corp |
Ayala Corp and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala Corp and Manila Mining
The main advantage of trading using opposite Ayala Corp and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Corp position performs unexpectedly, Manila 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| Ayala Corp vs. Manila Mining Corp | Ayala Corp vs. Philex Mining Corp | Ayala Corp vs. Security Bank Corp | Ayala Corp vs. Crown Asia Chemicals |
| Manila Mining vs. Nickel Asia Corp | Manila Mining vs. Apollo Global Capital | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Atlas Consolidated Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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