Correlation Between Concepcion Industrial and AyalaLand Logistics

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

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

Diversification Opportunities for Concepcion Industrial and AyalaLand Logistics

0.78

Correlation Coefficient

Concepcion Industrial  AyalaLand Logistics

Poor diversification

The 3 months correlation between Concepcion and AyalaLand is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Concepcion Industrial Corp and AyalaLand Logistics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AyalaLand Logistics and Concepcion Industrial 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 Concepcion Industrial Corp are associated (or correlated) with AyalaLand Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AyalaLand Logistics has no effect on the direction of Concepcion Industrial i.e., Concepcion Industrial and AyalaLand Logistics go up and down completely randomly.

Pair Corralation between Concepcion Industrial and AyalaLand Logistics

Assuming the 90 days trading horizon Concepcion Industrial Corp is expected to generate 0.85 times more return on investment than AyalaLand Logistics. However, Concepcion Industrial Corp is 1.17 times less risky than AyalaLand Logistics. It trades about 0.0 of its potential returns per unit of risk. AyalaLand Logistics Holdings is currently generating about -0.19 per unit of risk. If you would invest  1,376  in Concepcion Industrial Corp on October 23, 2024 and sell it today you would lose (10.00) from holding Concepcion Industrial Corp or give up 0.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	89.83%
Values	Daily Returns

Concepcion Industrial Corp  vs.  AyalaLand Logistics Holdings

Concepcion Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Concepcion Industrial and AyalaLand Logistics

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

The idea behind Concepcion Industrial Corp and AyalaLand Logistics Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.