Correlation Between Lopez Holdings and AC Energy

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

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

Diversification Opportunities for Lopez Holdings and AC Energy

-0.38

Correlation Coefficient

Lopez Holdings  AC Energy

Very good diversification

The 3 months correlation between Lopez and ACEN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lopez Holdings Corp and AC Energy Philippines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC Energy Philippines and Lopez Holdings 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 Lopez Holdings Corp are associated (or correlated) with AC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC Energy Philippines has no effect on the direction of Lopez Holdings i.e., Lopez Holdings and AC Energy go up and down completely randomly.

Pair Corralation between Lopez Holdings and AC Energy

Assuming the 90 days trading horizon Lopez Holdings Corp is expected to generate 1.55 times more return on investment than AC Energy. However, Lopez Holdings is 1.55 times more volatile than AC Energy Philippines. It trades about 0.29 of its potential returns per unit of risk. AC Energy Philippines is currently generating about -0.08 per unit of risk. If you would invest  256.00  in Lopez Holdings Corp on April 22, 2025 and sell it today you would earn a total of  144.00  from holding Lopez Holdings Corp or generate 56.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Lopez Holdings Corp  vs.  AC Energy Philippines

Lopez Holdings Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lopez Holdings Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lopez Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Lopez Holdings and AC Energy

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

The idea behind Lopez Holdings Corp and AC Energy Philippines 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..