Correlation Between Ayala Land and San Miguel
Can any of the company-specific risk be diversified away by investing in both Ayala Land and San Miguel 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 Land and San Miguel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala Land and San Miguel Pure, you can compare the effects of market volatilities on Ayala Land and San Miguel 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 Land with a short position of San Miguel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala Land and San Miguel.
Diversification Opportunities for Ayala Land and San Miguel
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ayala and San is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Land and San Miguel Pure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Miguel Pure and Ayala Land 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 Land are associated (or correlated) with San Miguel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Miguel Pure has no effect on the direction of Ayala Land i.e., Ayala Land and San Miguel go up and down completely randomly.
Pair Corralation between Ayala Land and San Miguel
Assuming the 90 days trading horizon Ayala Land is expected to under-perform the San Miguel. In addition to that, Ayala Land is 1.02 times more volatile than San Miguel Pure. It trades about -0.28 of its total potential returns per unit of risk. San Miguel Pure is currently generating about -0.05 per unit of volatility. If you would invest 5,396 in San Miguel Pure on September 13, 2024 and sell it today you would lose (121.00) from holding San Miguel Pure or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ayala Land vs. San Miguel Pure
Performance |
| Timeline |
| Ayala Land |
| San Miguel Pure |
Ayala Land and San Miguel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala Land and San Miguel
The main advantage of trading using opposite Ayala Land and San Miguel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Land position performs unexpectedly, San Miguel 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 San Miguel will offset losses from the drop in San Miguel's long position.| Ayala Land vs. Robinsons Land Corp | Ayala Land vs. Filinvest Development Coproration | Ayala Land vs. DoubleDragon Properties Corp | Ayala Land vs. DoubleDragon Properties Corp |
| San Miguel vs. Ever Gotesco Resources | San Miguel vs. GT Capital Holdings | San Miguel vs. Allhome Corp | San Miguel vs. Jollibee Foods 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 Stocks Directory module to find actively traded stocks across global markets.
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