Correlation Between San Miguel and Ayala Land
Can any of the company-specific risk be diversified away by investing in both San Miguel 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 San Miguel and Ayala Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Miguel Pure and Ayala Land, you can compare the effects of market volatilities on San Miguel 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 San Miguel with a short position of Ayala Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Miguel and Ayala Land.
Diversification Opportunities for San Miguel and Ayala Land
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between San and Ayala is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding San Miguel Pure and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land and San Miguel 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 San Miguel Pure 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 San Miguel i.e., San Miguel and Ayala Land go up and down completely randomly.
Pair Corralation between San Miguel and Ayala Land
Assuming the 90 days trading horizon San Miguel Pure is expected to generate 0.98 times more return on investment than Ayala Land. However, San Miguel Pure is 1.02 times less risky than Ayala Land. It trades about -0.05 of its potential returns per unit of risk. Ayala Land is currently generating about -0.28 per unit of risk. If you would invest 5,396 in San Miguel Pure on September 13, 2024 and sell it today you would lose (121.00) from holding San Miguel Pure or give up 2.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Miguel Pure vs. Ayala Land
Performance |
| Timeline |
| San Miguel Pure |
| Ayala Land |
San Miguel and Ayala Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Miguel and Ayala Land
The main advantage of trading using opposite San Miguel and Ayala Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Miguel 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.| San Miguel vs. Ever Gotesco Resources | San Miguel vs. GT Capital Holdings | San Miguel vs. Allhome Corp | San Miguel vs. Jollibee Foods Corp |
| Ayala Land vs. Robinsons Land Corp | Ayala Land vs. Filinvest Development Coproration | Ayala Land vs. DoubleDragon Properties Corp | Ayala Land vs. DoubleDragon Properties 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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