Correlation Between First Abacus and Aboitiz Power
Can any of the company-specific risk be diversified away by investing in both First Abacus and Aboitiz Power 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 First Abacus and Aboitiz Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Abacus Financial and Aboitiz Power Corp, you can compare the effects of market volatilities on First Abacus and Aboitiz Power 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 First Abacus with a short position of Aboitiz Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Aboitiz Power.
Diversification Opportunities for First Abacus and Aboitiz Power
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Aboitiz is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Aboitiz Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Power Corp and First Abacus 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 First Abacus Financial are associated (or correlated) with Aboitiz Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Power Corp has no effect on the direction of First Abacus i.e., First Abacus and Aboitiz Power go up and down completely randomly.
Pair Corralation between First Abacus and Aboitiz Power
Assuming the 90 days trading horizon First Abacus Financial is expected to generate 4.28 times more return on investment than Aboitiz Power. However, First Abacus is 4.28 times more volatile than Aboitiz Power Corp. It trades about 0.01 of its potential returns per unit of risk. Aboitiz Power Corp is currently generating about 0.03 per unit of risk. If you would invest 70.00 in First Abacus Financial on December 4, 2024 and sell it today you would lose (8.00) from holding First Abacus Financial or give up 11.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 18.96% |
| Values | Daily Returns |
First Abacus Financial vs. Aboitiz Power Corp
Performance |
| Timeline |
| First Abacus Financial |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| Aboitiz Power Corp |
First Abacus and Aboitiz Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Abacus and Aboitiz Power
The main advantage of trading using opposite First Abacus and Aboitiz Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Abacus position performs unexpectedly, Aboitiz Power 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 Aboitiz Power will offset losses from the drop in Aboitiz Power's long position.| First Abacus vs. STI Education Systems | First Abacus vs. Metropolitan Bank Trust | First Abacus vs. Semirara Mining Corp | First Abacus vs. Rizal Commercial Banking |
| Aboitiz Power vs. National Reinsurance | Aboitiz Power vs. COL Financial Group | Aboitiz Power vs. SM Investments Corp | Aboitiz Power vs. Sun Life Financial |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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