Correlation Between First Philippine and Altus Property

Can any of the company-specific risk be diversified away by investing in both First Philippine and Altus Property 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 First Philippine and Altus Property into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Philippine Holdings and Altus Property Ventures, you can compare the effects of market volatilities on First Philippine and Altus Property 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 First Philippine with a short position of Altus Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Philippine and Altus Property.

Diversification Opportunities for First Philippine and Altus Property

0.67

Correlation Coefficient

First Philippine  Altus Property

Poor diversification

The 3 months correlation between First and Altus is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding First Philippine Holdings and Altus Property Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Property Ventures and First Philippine 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 First Philippine Holdings are associated (or correlated) with Altus Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Property Ventures has no effect on the direction of First Philippine i.e., First Philippine and Altus Property go up and down completely randomly.

Pair Corralation between First Philippine and Altus Property

Assuming the 90 days trading horizon First Philippine Holdings is expected to generate 1.02 times more return on investment than Altus Property. However, First Philippine is 1.02 times more volatile than Altus Property Ventures. It trades about 0.18 of its potential returns per unit of risk. Altus Property Ventures is currently generating about 0.05 per unit of risk. If you would invest  5,598  in First Philippine Holdings on April 20, 2025 and sell it today you would earn a total of  2,202  from holding First Philippine Holdings or generate 39.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.69%
Values	Daily Returns

First Philippine Holdings  vs.  Altus Property Ventures

First Philippine Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Philippine Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, First Philippine exhibited solid returns over the last few months and may actually be approaching a breakup point.

Altus Property Ventures

Risk-Adjusted Performance

Insignificant

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

Pair Trading with First Philippine and Altus Property

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

The idea behind First Philippine Holdings and Altus Property Ventures 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.