Correlation Between Ayala and Swire Pacific
Can any of the company-specific risk be diversified away by investing in both Ayala and Swire Pacific 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 Swire Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ayala and Swire Pacific Ltd, you can compare the effects of market volatilities on Ayala and Swire Pacific 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 Swire Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala and Swire Pacific.
Diversification Opportunities for Ayala and Swire Pacific
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ayala and Swire is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ayala and Swire Pacific Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Pacific 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 Swire Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Pacific has no effect on the direction of Ayala i.e., Ayala and Swire Pacific go up and down completely randomly.
Pair Corralation between Ayala and Swire Pacific
If you would invest 1,005 in Ayala on September 2, 2024 and sell it today you would earn a total of 130.00 from holding Ayala or generate 12.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ayala vs. Swire Pacific Ltd
Performance |
| Timeline |
| Ayala |
| Swire Pacific |
Ayala and Swire Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ayala and Swire Pacific
The main advantage of trading using opposite Ayala and Swire Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala position performs unexpectedly, Swire Pacific 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 Swire Pacific will offset losses from the drop in Swire Pacific's long position.| Ayala vs. Stagwell | Ayala vs. Uranium Energy Corp | Ayala vs. Village Super Market | Ayala vs. Hf Foods Group |
| Swire Pacific vs. CITIC Limited | Swire Pacific vs. Fosun International | Swire Pacific vs. Cibl Inc | Swire Pacific vs. Jardine Matheson Holdings |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |