Correlation Between Filinvest REIT and Cebu Air

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

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

Diversification Opportunities for Filinvest REIT and Cebu Air

0.77

Correlation Coefficient

Filinvest REIT  Cebu Air

Poor diversification

The 3 months correlation between Filinvest and Cebu is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and Cebu Air Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air Preferred and Filinvest 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 Filinvest REIT Corp are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air Preferred has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and Cebu Air go up and down completely randomly.

Pair Corralation between Filinvest REIT and Cebu Air

Assuming the 90 days trading horizon Filinvest REIT is expected to generate 1.2 times less return on investment than Cebu Air. But when comparing it to its historical volatility, Filinvest REIT Corp is 2.84 times less risky than Cebu Air. It trades about 0.23 of its potential returns per unit of risk. Cebu Air Preferred is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,660  in Cebu Air Preferred on April 20, 2025 and sell it today you would earn a total of  350.00  from holding Cebu Air Preferred or generate 9.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.71%
Values	Daily Returns

Filinvest REIT Corp  vs.  Cebu Air Preferred

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 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, Filinvest REIT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Cebu Air Preferred

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cebu Air Preferred are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Cebu Air may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Filinvest REIT and Cebu Air

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

The idea behind Filinvest REIT Corp and Cebu Air Preferred 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.