Correlation Between COL Financial and Ayala Land
Can any of the company-specific risk be diversified away by investing in both COL Financial and Ayala Land 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 COL Financial and Ayala Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COL Financial Group and Ayala Land, you can compare the effects of market volatilities on COL Financial and Ayala Land 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 COL Financial with a short position of Ayala Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of COL Financial and Ayala Land.
Diversification Opportunities for COL Financial and Ayala Land
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COL and Ayala is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding COL Financial Group and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land and COL Financial 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 COL Financial Group are associated (or correlated) with Ayala Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Land has no effect on the direction of COL Financial i.e., COL Financial and Ayala Land go up and down completely randomly.
Pair Corralation between COL Financial and Ayala Land
Assuming the 90 days trading horizon COL Financial Group is expected to under-perform the Ayala Land. But the stock apears to be less risky and, when comparing its historical volatility, COL Financial Group is 1.09 times less risky than Ayala Land. The stock trades about -0.03 of its potential returns per unit of risk. The Ayala Land is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,760 in Ayala Land on September 3, 2024 and sell it today you would earn a total of 100.00 from holding Ayala Land or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
COL Financial Group vs. Ayala Land
Performance |
| Timeline |
| COL Financial Group |
| Ayala Land |
COL Financial and Ayala Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COL Financial and Ayala Land
The main advantage of trading using opposite COL Financial and Ayala Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COL Financial position performs unexpectedly, Ayala Land 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 Ayala Land will offset losses from the drop in Ayala Land's long position.| COL Financial vs. Bright Kindle Resources | COL Financial vs. GT Capital Holdings | COL Financial vs. Allhome Corp | COL Financial vs. Jollibee Foods Corp |
| Ayala Land vs. Metro Retail Stores | Ayala Land vs. Manila Mining Corp | Ayala Land vs. Alliance Select Foods | Ayala Land vs. COL Financial Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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