Correlation Between Ayala and Stagwell
Can any of the company-specific risk be diversified away by investing in both Ayala and Stagwell 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 and Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala and Stagwell, you can compare the effects of market volatilities on Ayala and Stagwell 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 with a short position of Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala and Stagwell.
Diversification Opportunities for Ayala and Stagwell
Modest diversification
The 3 months correlation between Ayala and Stagwell is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ayala and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell and Ayala 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 are associated (or correlated) with Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Ayala i.e., Ayala and Stagwell go up and down completely randomly.
Pair Corralation between Ayala and Stagwell
Assuming the 90 days horizon Ayala is expected to generate 1.52 times less return on investment than Stagwell. In addition to that, Ayala is 1.13 times more volatile than Stagwell. It trades about 0.22 of its total potential returns per unit of risk. Stagwell is currently generating about 0.38 per unit of volatility. If you would invest 650.00 in Stagwell on September 2, 2024 and sell it today you would earn a total of 136.00 from holding Stagwell or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ayala vs. Stagwell
Performance |
| Timeline |
| Ayala |
| Stagwell |
Ayala and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala and Stagwell
The main advantage of trading using opposite Ayala and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Ayala vs. Stagwell | Ayala vs. Uranium Energy Corp | Ayala vs. Village Super Market | Ayala vs. Hf Foods Group |
| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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