Correlation Between AyalaLand Logistics and Ayala Land

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

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

Diversification Opportunities for AyalaLand Logistics and Ayala Land

-0.32

Correlation Coefficient

AyalaLand Logistics  Ayala Land

Very good diversification

The 3 months correlation between AyalaLand and Ayala is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AyalaLand Logistics Holdings and Ayala Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Land and AyalaLand Logistics 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 Logistics Holdings are associated (or correlated) with Ayala Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Land has no effect on the direction of AyalaLand Logistics i.e., AyalaLand Logistics and Ayala Land go up and down completely randomly.

Pair Corralation between AyalaLand Logistics and Ayala Land

Assuming the 90 days trading horizon AyalaLand Logistics Holdings is expected to under-perform the Ayala Land. But the stock apears to be less risky and, when comparing its historical volatility, AyalaLand Logistics Holdings is 1.05 times less risky than Ayala Land. The stock trades about -0.03 of its potential returns per unit of risk. The Ayala Land is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,793  in Ayala Land on April 24, 2025 and sell it today you would lose (163.00) from holding Ayala Land or give up 5.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

AyalaLand Logistics Holdings  vs.  Ayala Land

AyalaLand Logistics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AyalaLand Logistics Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, AyalaLand Logistics may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ayala Land

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ayala Land are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Ayala Land may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AyalaLand Logistics and Ayala Land

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

The idea behind AyalaLand Logistics Holdings and Ayala Land 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.