Correlation Between AAPICO Hitech and Laguna Resorts

Can any of the company-specific risk be diversified away by investing in both AAPICO Hitech and Laguna Resorts 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 AAPICO Hitech and Laguna Resorts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AAPICO Hitech Public and Laguna Resorts Hotels, you can compare the effects of market volatilities on AAPICO Hitech and Laguna Resorts 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 AAPICO Hitech with a short position of Laguna Resorts. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAPICO Hitech and Laguna Resorts.

Diversification Opportunities for AAPICO Hitech and Laguna Resorts

0.4

Correlation Coefficient

AAPICO Hitech  Laguna Resorts

Very weak diversification

The 3 months correlation between AAPICO and Laguna is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AAPICO Hitech Public and Laguna Resorts Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laguna Resorts Hotels and AAPICO Hitech 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 AAPICO Hitech Public are associated (or correlated) with Laguna Resorts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laguna Resorts Hotels has no effect on the direction of AAPICO Hitech i.e., AAPICO Hitech and Laguna Resorts go up and down completely randomly.

Pair Corralation between AAPICO Hitech and Laguna Resorts

Assuming the 90 days horizon AAPICO Hitech Public is expected to under-perform the Laguna Resorts. In addition to that, AAPICO Hitech is 1.03 times more volatile than Laguna Resorts Hotels. It trades about -0.17 of its total potential returns per unit of risk. Laguna Resorts Hotels is currently generating about -0.01 per unit of volatility. If you would invest  3,900  in Laguna Resorts Hotels on December 29, 2024 and sell it today you would lose (100.00) from holding Laguna Resorts Hotels or give up 2.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AAPICO Hitech Public  vs.  Laguna Resorts Hotels

AAPICO Hitech Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days AAPICO Hitech Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Laguna Resorts Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Laguna Resorts Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Laguna Resorts is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AAPICO Hitech and Laguna Resorts

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

The idea behind AAPICO Hitech Public and Laguna Resorts Hotels 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.