Correlation Between Cirtek Holdings and AC Energy

Can any of the company-specific risk be diversified away by investing in both Cirtek Holdings and AC Energy 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 Cirtek Holdings and AC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Cirtek Holdings and AC Energy

0.17

Correlation Coefficient

Cirtek Holdings  AC Energy

Average diversification

The 3 months correlation between Cirtek and ACEN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cirtek Holdings Philippines and AC Energy Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Energy Philippines and Cirtek Holdings 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 Cirtek Holdings Philippines are associated (or correlated) with AC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Energy Philippines has no effect on the direction of Cirtek Holdings i.e., Cirtek Holdings and AC Energy go up and down completely randomly.

Pair Corralation between Cirtek Holdings and AC Energy

Assuming the 90 days trading horizon Cirtek Holdings Philippines is expected to generate 1.04 times more return on investment than AC Energy. However, Cirtek Holdings is 1.04 times more volatile than AC Energy Philippines. It trades about 0.01 of its potential returns per unit of risk. AC Energy Philippines is currently generating about -0.14 per unit of risk. If you would invest  4,900  in Cirtek Holdings Philippines on November 27, 2024 and sell it today you would lose (55.00) from holding Cirtek Holdings Philippines or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.27%
Values	Daily Returns

Cirtek Holdings Philippines  vs.  AC Energy Philippines

Cirtek Holdings Phil

Risk-Adjusted Performance

Very Weak

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

AC Energy Philippines

Risk-Adjusted Performance

Very Weak

Over the last 90 days AC Energy Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cirtek Holdings and AC Energy

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

The idea behind Cirtek Holdings Philippines and AC Energy Philippines 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.