Correlation Between Allhome Corp and AC Energy
Can any of the company-specific risk be diversified away by investing in both Allhome Corp and AC Energy 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 Allhome Corp and AC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and AC Energy Philippines, you can compare the effects of market volatilities on Allhome Corp and AC Energy 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 Allhome Corp with a short position of AC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and AC Energy.
Diversification Opportunities for Allhome Corp and AC Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allhome and ACEN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and AC Energy Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Energy Philippines and Allhome Corp 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 Allhome Corp are associated (or correlated) with AC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Energy Philippines has no effect on the direction of Allhome Corp i.e., Allhome Corp and AC Energy go up and down completely randomly.
Pair Corralation between Allhome Corp and AC Energy
Assuming the 90 days trading horizon Allhome Corp is expected to generate 1.02 times more return on investment than AC Energy. However, Allhome Corp is 1.02 times more volatile than AC Energy Philippines. It trades about -0.16 of its potential returns per unit of risk. AC Energy Philippines is currently generating about -0.31 per unit of risk. If you would invest 66.00 in Allhome Corp on September 13, 2024 and sell it today you would lose (6.00) from holding Allhome Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allhome Corp vs. AC Energy Philippines
Performance |
| Timeline |
| Allhome Corp |
| AC Energy Philippines |
Allhome Corp and AC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allhome Corp and AC Energy
The main advantage of trading using opposite Allhome Corp and AC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp position performs unexpectedly, AC Energy 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 AC Energy will offset losses from the drop in AC Energy's long position.| Allhome Corp vs. GT Capital Holdings | Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp | Allhome Corp vs. Monde Nissin Corp |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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