Correlation Between Ayala Corp and Axelum Resources

Can any of the company-specific risk be diversified away by investing in both Ayala Corp and Axelum Resources 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 Ayala Corp and Axelum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ayala Corp and Axelum Resources Corp, you can compare the effects of market volatilities on Ayala Corp and Axelum Resources 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 Ayala Corp with a short position of Axelum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ayala Corp and Axelum Resources.

Diversification Opportunities for Ayala Corp and Axelum Resources

0.11

Correlation Coefficient

Ayala Corp  Axelum Resources

Average diversification

The 3 months correlation between Ayala and Axelum is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ayala Corp and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp and Ayala 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 Ayala Corp are associated (or correlated) with Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Ayala Corp i.e., Ayala Corp and Axelum Resources go up and down completely randomly.

Pair Corralation between Ayala Corp and Axelum Resources

Assuming the 90 days trading horizon Ayala Corp is expected to generate 0.61 times more return on investment than Axelum Resources. However, Ayala Corp is 1.65 times less risky than Axelum Resources. It trades about -0.04 of its potential returns per unit of risk. Axelum Resources Corp is currently generating about -0.15 per unit of risk. If you would invest  59,900  in Ayala Corp on December 27, 2024 and sell it today you would lose (2,800) from holding Ayala Corp or give up 4.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Ayala Corp  vs.  Axelum Resources Corp

Ayala Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ayala Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ayala Corp is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Axelum Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axelum Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ayala Corp and Axelum Resources

The main advantage of trading using opposite Ayala Corp and Axelum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ayala Corp position performs unexpectedly, Axelum Resources 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 Axelum Resources will offset losses from the drop in Axelum Resources' long position.

The idea behind Ayala Corp and Axelum Resources Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.