Correlation Between AyalaLand Logistics and Filinvest Land

Can any of the company-specific risk be diversified away by investing in both AyalaLand Logistics and Filinvest 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 AyalaLand Logistics and Filinvest Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AyalaLand Logistics Holdings and Filinvest Land, you can compare the effects of market volatilities on AyalaLand Logistics and Filinvest 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 AyalaLand Logistics with a short position of Filinvest Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of AyalaLand Logistics and Filinvest Land.

Diversification Opportunities for AyalaLand Logistics and Filinvest Land

0.43

Correlation Coefficient

AyalaLand Logistics  Filinvest Land

Very weak diversification

The 3 months correlation between AyalaLand and Filinvest is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AyalaLand Logistics Holdings and Filinvest Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest Land and AyalaLand Logistics 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 AyalaLand Logistics Holdings are associated (or correlated) with Filinvest Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest Land has no effect on the direction of AyalaLand Logistics i.e., AyalaLand Logistics and Filinvest Land go up and down completely randomly.

Pair Corralation between AyalaLand Logistics and Filinvest Land

Assuming the 90 days trading horizon AyalaLand Logistics Holdings is expected to under-perform the Filinvest Land. But the stock apears to be less risky and, when comparing its historical volatility, AyalaLand Logistics Holdings is 1.33 times less risky than Filinvest Land. The stock trades about -0.04 of its potential returns per unit of risk. The Filinvest Land is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Filinvest Land on September 14, 2024 and sell it today you would earn a total of  7.00  from holding Filinvest Land or generate 11.11% return on investment over 90 days.

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

AyalaLand Logistics Holdings  vs.  Filinvest Land

AyalaLand Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AyalaLand Logistics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, AyalaLand Logistics is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Filinvest Land

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Filinvest Land are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Filinvest Land exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AyalaLand Logistics and Filinvest Land

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

The idea behind AyalaLand Logistics Holdings and Filinvest Land 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.