Correlation Between National Reinsurance and AyalaLand REIT
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and AyalaLand REIT 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 AyalaLand REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and AyalaLand REIT, you can compare the effects of market volatilities on National Reinsurance and AyalaLand REIT 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 AyalaLand REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and AyalaLand REIT.
Diversification Opportunities for National Reinsurance and AyalaLand REIT
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and AyalaLand is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and AyalaLand REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AyalaLand REIT 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 AyalaLand REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AyalaLand REIT has no effect on the direction of National Reinsurance i.e., National Reinsurance and AyalaLand REIT go up and down completely randomly.
Pair Corralation between National Reinsurance and AyalaLand REIT
Assuming the 90 days trading horizon National Reinsurance is expected to generate 5.12 times more return on investment than AyalaLand REIT. However, National Reinsurance is 5.12 times more volatile than AyalaLand REIT. It trades about 0.04 of its potential returns per unit of risk. AyalaLand REIT is currently generating about 0.04 per unit of risk. If you would invest 62.00 in National Reinsurance on September 12, 2024 and sell it today you would earn a total of 6.00 from holding National Reinsurance or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.46% |
| Values | Daily Returns |
National Reinsurance vs. AyalaLand REIT
Performance |
| Timeline |
| National Reinsurance |
| AyalaLand REIT |
National Reinsurance and AyalaLand REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and AyalaLand REIT
The main advantage of trading using opposite National Reinsurance and AyalaLand REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, AyalaLand REIT 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 AyalaLand REIT will offset losses from the drop in AyalaLand REIT'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 |
| AyalaLand REIT vs. Top Frontier Investment | AyalaLand REIT vs. Jollibee Foods Corp | AyalaLand REIT vs. Integrated Micro Electronics | AyalaLand REIT vs. National Reinsurance |
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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