Correlation Between Cebu Air and Filinvest REIT

Can any of the company-specific risk be diversified away by investing in both Cebu Air and Filinvest REIT 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 Cebu Air and Filinvest REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cebu Air and Filinvest REIT Corp, you can compare the effects of market volatilities on Cebu Air and Filinvest REIT 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 Cebu Air with a short position of Filinvest REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Filinvest REIT.

Diversification Opportunities for Cebu Air and Filinvest REIT

0.82

Correlation Coefficient

Cebu Air  Filinvest REIT

Very poor diversification

The 3 months correlation between Cebu and Filinvest is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air and Filinvest REIT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Filinvest REIT Corp and Cebu Air 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 Cebu Air are associated (or correlated) with Filinvest REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Filinvest REIT Corp has no effect on the direction of Cebu Air i.e., Cebu Air and Filinvest REIT go up and down completely randomly.

Pair Corralation between Cebu Air and Filinvest REIT

Assuming the 90 days trading horizon Cebu Air is expected to generate 2.09 times less return on investment than Filinvest REIT. In addition to that, Cebu Air is 1.18 times more volatile than Filinvest REIT Corp. It trades about 0.11 of its total potential returns per unit of risk. Filinvest REIT Corp is currently generating about 0.27 per unit of volatility. If you would invest  308.00  in Filinvest REIT Corp on April 24, 2025 and sell it today you would earn a total of  37.00  from holding Filinvest REIT Corp or generate 12.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Cebu Air  vs.  Filinvest REIT Corp

Cebu Air

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cebu Air are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Cebu Air is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Filinvest REIT Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Filinvest REIT Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, Filinvest REIT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Cebu Air and Filinvest REIT

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

The idea behind Cebu Air and Filinvest REIT 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.