Correlation Between Aboitiz Power and COL Financial
Can any of the company-specific risk be diversified away by investing in both Aboitiz Power and COL Financial 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 COL Financial 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 COL Financial Group, you can compare the effects of market volatilities on Aboitiz Power and COL Financial 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 COL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aboitiz Power and COL Financial.
Diversification Opportunities for Aboitiz Power and COL Financial
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aboitiz and COL is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Aboitiz Power Corp and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group 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 COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Aboitiz Power i.e., Aboitiz Power and COL Financial go up and down completely randomly.
Pair Corralation between Aboitiz Power and COL Financial
Assuming the 90 days trading horizon Aboitiz Power Corp is expected to generate 1.6 times more return on investment than COL Financial. However, Aboitiz Power is 1.6 times more volatile than COL Financial Group. It trades about 0.09 of its potential returns per unit of risk. COL Financial Group is currently generating about 0.02 per unit of risk. If you would invest 4,000 in Aboitiz Power Corp on December 6, 2024 and sell it today you would earn a total of 195.00 from holding Aboitiz Power Corp or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Aboitiz Power Corp vs. COL Financial Group
Performance |
| Timeline |
| Aboitiz Power Corp |
| COL Financial Group |
Aboitiz Power and COL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aboitiz Power and COL Financial
The main advantage of trading using opposite Aboitiz Power and COL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aboitiz Power position performs unexpectedly, COL Financial 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 COL Financial will offset losses from the drop in COL Financial's long position.| Aboitiz Power vs. Top Frontier Investment | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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