Correlation Between National Reinsurance and Ayala Corp
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Ayala Corp 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 National Reinsurance and Ayala Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Ayala Corp, you can compare the effects of market volatilities on National Reinsurance and Ayala Corp 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 National Reinsurance with a short position of Ayala Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Ayala Corp.
Diversification Opportunities for National Reinsurance and Ayala Corp
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Ayala is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Ayala Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Corp and National Reinsurance 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 National Reinsurance are associated (or correlated) with Ayala Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Corp has no effect on the direction of National Reinsurance i.e., National Reinsurance and Ayala Corp go up and down completely randomly.
Pair Corralation between National Reinsurance and Ayala Corp
Assuming the 90 days trading horizon National Reinsurance is expected to generate 4.27 times more return on investment than Ayala Corp. However, National Reinsurance is 4.27 times more volatile than Ayala Corp. It trades about 0.06 of its potential returns per unit of risk. Ayala Corp is currently generating about 0.02 per unit of risk. If you would invest 43.00 in National Reinsurance on September 12, 2024 and sell it today you would earn a total of 25.00 from holding National Reinsurance or generate 58.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.16% |
| Values | Daily Returns |
National Reinsurance vs. Ayala Corp
Performance |
| Timeline |
| National Reinsurance |
| Ayala Corp |
National Reinsurance and Ayala Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Ayala Corp
The main advantage of trading using opposite National Reinsurance and Ayala Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Ayala Corp 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 Corp will offset losses from the drop in Ayala Corp's long position.| National Reinsurance vs. Manulife Financial Corp | National Reinsurance vs. Sun Life Financial | National Reinsurance vs. GT Capital Holdings | National Reinsurance vs. Allhome Corp |
| Ayala Corp vs. National Reinsurance | Ayala Corp vs. Cebu Air Preferred | Ayala Corp vs. Metropolitan Bank Trust | Ayala Corp vs. Asia United Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |