Correlation Between AC Energy and Aboitiz Power

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

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

Diversification Opportunities for AC Energy and Aboitiz Power

0.14

Correlation Coefficient

AC Energy  Aboitiz Power

Average diversification

The 3 months correlation between ACEN and Aboitiz is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding AC Energy Philippines and Aboitiz Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aboitiz Power Corp and AC Energy 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 AC Energy Philippines are associated (or correlated) with Aboitiz Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aboitiz Power Corp has no effect on the direction of AC Energy i.e., AC Energy and Aboitiz Power go up and down completely randomly.

Pair Corralation between AC Energy and Aboitiz Power

Assuming the 90 days trading horizon AC Energy Philippines is expected to under-perform the Aboitiz Power. But the stock apears to be less risky and, when comparing its historical volatility, AC Energy Philippines is 1.36 times less risky than Aboitiz Power. The stock trades about -0.01 of its potential returns per unit of risk. The Aboitiz Power Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,900  in Aboitiz Power Corp on April 24, 2025 and sell it today you would earn a total of  400.00  from holding Aboitiz Power Corp or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

AC Energy Philippines  vs.  Aboitiz Power Corp

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 comparatively stable basic indicators, AC Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Aboitiz Power Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aboitiz Power Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Aboitiz Power may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AC Energy and Aboitiz Power

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

The idea behind AC Energy Philippines and Aboitiz Power Corp 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .