Correlation Between Ayala Land and PLDT
Can any of the company-specific risk be diversified away by investing in both Ayala Land and PLDT 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 PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala Land and PLDT Inc, you can compare the effects of market volatilities on Ayala Land and PLDT 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 PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala Land and PLDT.
Diversification Opportunities for Ayala Land and PLDT
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ayala and PLDT is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Land and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of Ayala Land i.e., Ayala Land and PLDT go up and down completely randomly.
Pair Corralation between Ayala Land and PLDT
Assuming the 90 days trading horizon Ayala Land is expected to under-perform the PLDT. But the stock apears to be less risky and, when comparing its historical volatility, Ayala Land is 1.08 times less risky than PLDT. The stock trades about -0.28 of its potential returns per unit of risk. The PLDT Inc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 134,000 in PLDT Inc on September 13, 2024 and sell it today you would lose (4,000) from holding PLDT Inc or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ayala Land vs. PLDT Inc
Performance |
| Timeline |
| Ayala Land |
| PLDT Inc |
Ayala Land and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala Land and PLDT
The main advantage of trading using opposite Ayala Land and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Land position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT'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 |
| PLDT vs. Metro Retail Stores | PLDT vs. COL Financial Group | PLDT vs. Robinsons Retail Holdings | PLDT vs. National Reinsurance |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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