Correlation Between Filinvest REIT and Asia United
Can any of the company-specific risk be diversified away by investing in both Filinvest REIT and Asia United 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 Filinvest REIT and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Filinvest REIT Corp and Asia United Bank, you can compare the effects of market volatilities on Filinvest REIT and Asia United 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 Filinvest REIT with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filinvest REIT and Asia United.
Diversification Opportunities for Filinvest REIT and Asia United
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Filinvest and Asia is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank and Filinvest 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 Filinvest REIT Corp are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and Asia United go up and down completely randomly.
Pair Corralation between Filinvest REIT and Asia United
Assuming the 90 days trading horizon Filinvest REIT is expected to generate 1.34 times less return on investment than Asia United. But when comparing it to its historical volatility, Filinvest REIT Corp is 1.58 times less risky than Asia United. It trades about 0.23 of its potential returns per unit of risk. Asia United Bank is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Asia United Bank on November 18, 2024 and sell it today you would earn a total of 540.00 from holding Asia United Bank or generate 7.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Filinvest REIT Corp vs. Asia United Bank
Performance |
Timeline |
Filinvest REIT Corp |
Asia United Bank |
Filinvest REIT and Asia United Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Filinvest REIT and Asia United
The main advantage of trading using opposite Filinvest REIT and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Filinvest REIT position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.Filinvest REIT vs. AyalaLand REIT | ||
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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