Correlation Between AyalaLand REIT and Lepanto Consolidated
Can any of the company-specific risk be diversified away by investing in both AyalaLand REIT and Lepanto Consolidated 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 Lepanto Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AyalaLand REIT and Lepanto Consolidated Mining, you can compare the effects of market volatilities on AyalaLand REIT and Lepanto Consolidated 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 Lepanto Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of AyalaLand REIT and Lepanto Consolidated.
Diversification Opportunities for AyalaLand REIT and Lepanto Consolidated
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AyalaLand and Lepanto is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding AyalaLand REIT and Lepanto Consolidated Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lepanto Consolidated 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 Lepanto Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lepanto Consolidated has no effect on the direction of AyalaLand REIT i.e., AyalaLand REIT and Lepanto Consolidated go up and down completely randomly.
Pair Corralation between AyalaLand REIT and Lepanto Consolidated
Assuming the 90 days trading horizon AyalaLand REIT is expected to generate 7.79 times less return on investment than Lepanto Consolidated. But when comparing it to its historical volatility, AyalaLand REIT is 3.67 times less risky than Lepanto Consolidated. It trades about 0.03 of its potential returns per unit of risk. Lepanto Consolidated Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.20 in Lepanto Consolidated Mining on September 23, 2024 and sell it today you would earn a total of 0.60 from holding Lepanto Consolidated Mining or generate 9.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 84.62% |
Values | Daily Returns |
AyalaLand REIT vs. Lepanto Consolidated Mining
Performance |
Timeline |
AyalaLand REIT |
Lepanto Consolidated |
AyalaLand REIT and Lepanto Consolidated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AyalaLand REIT and Lepanto Consolidated
The main advantage of trading using opposite AyalaLand REIT and Lepanto Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AyalaLand REIT position performs unexpectedly, Lepanto Consolidated 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 Lepanto Consolidated will offset losses from the drop in Lepanto Consolidated'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 |
Lepanto Consolidated vs. Manila Mining Corp | Lepanto Consolidated vs. National Reinsurance | Lepanto Consolidated vs. BDO Unibank | Lepanto Consolidated vs. Semirara Mining 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |