Correlation Between Altus Property and Manila Electric
Can any of the company-specific risk be diversified away by investing in both Altus Property and Manila Electric 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 Altus Property and Manila Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Property Ventures and Manila Electric Co, you can compare the effects of market volatilities on Altus Property and Manila Electric 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 Altus Property with a short position of Manila Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Property and Manila Electric.
Diversification Opportunities for Altus Property and Manila Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altus and Manila is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Altus Property Ventures and Manila Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Electric and Altus Property 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 Altus Property Ventures are associated (or correlated) with Manila Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Electric has no effect on the direction of Altus Property i.e., Altus Property and Manila Electric go up and down completely randomly.
Pair Corralation between Altus Property and Manila Electric
Assuming the 90 days trading horizon Altus Property Ventures is expected to generate 1.06 times more return on investment than Manila Electric. However, Altus Property is 1.06 times more volatile than Manila Electric Co. It trades about 0.04 of its potential returns per unit of risk. Manila Electric Co is currently generating about -0.01 per unit of risk. If you would invest 840.00 in Altus Property Ventures on August 27, 2024 and sell it today you would earn a total of 14.00 from holding Altus Property Ventures or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altus Property Ventures vs. Manila Electric Co
Performance |
| Timeline |
| Altus Property Ventures |
| Manila Electric |
Altus Property and Manila Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Property and Manila Electric
The main advantage of trading using opposite Altus Property and Manila Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Property position performs unexpectedly, Manila Electric 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 Electric will offset losses from the drop in Manila Electric's long position.The idea behind Altus Property Ventures and Manila Electric Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Manila Electric vs. Aboitiz Equity Ventures | Manila Electric vs. Allhome Corp | Manila Electric vs. LFM Properties Corp | Manila Electric vs. Altus Property Ventures |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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