Correlation Between Security Bank and Ayala Land
Can any of the company-specific risk be diversified away by investing in both Security Bank 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 Security Bank and Ayala Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Bank Corp and Ayala Land, you can compare the effects of market volatilities on Security Bank 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 Security Bank with a short position of Ayala Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Ayala Land.
Diversification Opportunities for Security Bank and Ayala Land
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Security and Ayala is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land and Security Bank 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 Security Bank Corp 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 Security Bank i.e., Security Bank and Ayala Land go up and down completely randomly.
Pair Corralation between Security Bank and Ayala Land
Assuming the 90 days trading horizon Security Bank Corp is expected to generate 1.11 times more return on investment than Ayala Land. However, Security Bank is 1.11 times more volatile than Ayala Land. It trades about -0.06 of its potential returns per unit of risk. Ayala Land is currently generating about -0.23 per unit of risk. If you would invest 9,044 in Security Bank Corp on September 1, 2024 and sell it today you would lose (364.00) from holding Security Bank Corp or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Security Bank Corp vs. Ayala Land
Performance |
| Timeline |
| Security Bank Corp |
| Ayala Land |
Security Bank and Ayala Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Ayala Land
The main advantage of trading using opposite Security Bank and Ayala Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank 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.| Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Philippine National Bank | Security Bank vs. Asia United Bank | Security Bank vs. Philippine Savings Bank |
| Ayala Land vs. BDO Unibank | Ayala Land vs. Security Bank Corp | Ayala Land vs. Lepanto Consolidated Mining | Ayala Land vs. Philex Mining 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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