Correlation Between AyalaLand REIT and Metro Retail
Can any of the company-specific risk be diversified away by investing in both AyalaLand REIT and Metro Retail 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 REIT and Metro Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AyalaLand REIT and Metro Retail Stores, you can compare the effects of market volatilities on AyalaLand REIT and Metro Retail 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 REIT with a short position of Metro Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AyalaLand REIT and Metro Retail.
Diversification Opportunities for AyalaLand REIT and Metro Retail
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AyalaLand and Metro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AyalaLand REIT and Metro Retail Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Retail Stores and AyalaLand REIT 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 REIT are associated (or correlated) with Metro Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Retail Stores has no effect on the direction of AyalaLand REIT i.e., AyalaLand REIT and Metro Retail go up and down completely randomly.
Pair Corralation between AyalaLand REIT and Metro Retail
Assuming the 90 days trading horizon AyalaLand REIT is expected to generate 0.75 times more return on investment than Metro Retail. However, AyalaLand REIT is 1.33 times less risky than Metro Retail. It trades about 0.06 of its potential returns per unit of risk. Metro Retail Stores is currently generating about 0.0 per unit of risk. If you would invest 3,292 in AyalaLand REIT on September 24, 2024 and sell it today you would earn a total of 423.00 from holding AyalaLand REIT or generate 12.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.34% |
Values | Daily Returns |
AyalaLand REIT vs. Metro Retail Stores
Performance |
Timeline |
AyalaLand REIT |
Metro Retail Stores |
AyalaLand REIT and Metro Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AyalaLand REIT and Metro Retail
The main advantage of trading using opposite AyalaLand REIT and Metro Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AyalaLand REIT position performs unexpectedly, Metro Retail 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 Metro Retail will offset losses from the drop in Metro Retail's long position.AyalaLand REIT vs. Filinvest REIT Corp | AyalaLand REIT vs. DDMP REIT | AyalaLand REIT vs. Century Pacific Food | AyalaLand REIT vs. RFM Corp |
Metro Retail vs. Lepanto Consolidated Mining | Metro Retail vs. Crown Asia Chemicals | Metro Retail vs. Pacificonline Systems | Metro Retail vs. Jollibee Foods 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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