Correlation Between Aboitiz Power and AC Energy
Can any of the company-specific risk be diversified away by investing in both Aboitiz Power and AC Energy 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 Aboitiz Power and AC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aboitiz Power Corp and AC Energy Philippines, you can compare the effects of market volatilities on Aboitiz Power and AC Energy 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 Aboitiz Power with a short position of AC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aboitiz Power and AC Energy.
Diversification Opportunities for Aboitiz Power and AC Energy
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aboitiz and ACEN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aboitiz Power Corp and AC Energy Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Energy Philippines and Aboitiz Power 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 Aboitiz Power Corp are associated (or correlated) with AC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Energy Philippines has no effect on the direction of Aboitiz Power i.e., Aboitiz Power and AC Energy go up and down completely randomly.
Pair Corralation between Aboitiz Power and AC Energy
Assuming the 90 days trading horizon Aboitiz Power Corp is expected to generate 0.36 times more return on investment than AC Energy. However, Aboitiz Power Corp is 2.75 times less risky than AC Energy. It trades about 0.0 of its potential returns per unit of risk. AC Energy Philippines is currently generating about -0.31 per unit of risk. If you would invest 3,755 in Aboitiz Power Corp on September 13, 2024 and sell it today you would lose (5.00) from holding Aboitiz Power Corp or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aboitiz Power Corp vs. AC Energy Philippines
Performance |
| Timeline |
| Aboitiz Power Corp |
| AC Energy Philippines |
Aboitiz Power and AC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aboitiz Power and AC Energy
The main advantage of trading using opposite Aboitiz Power and AC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aboitiz Power position performs unexpectedly, AC Energy 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 AC Energy will offset losses from the drop in AC Energy's long position.| Aboitiz Power vs. Metropolitan Bank Trust | Aboitiz Power vs. Century Pacific Food | Aboitiz Power vs. Philippine Business Bank | Aboitiz Power vs. Security Bank Corp |
| AC Energy vs. Philex Mining Corp | AC Energy vs. Lepanto Consolidated Mining | AC Energy vs. Atlas Consolidated Mining | AC Energy vs. Union Bank of |
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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