Correlation Between Amada and Metro Pacific

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Can any of the company-specific risk be diversified away by investing in both Amada and Metro Pacific 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 Amada and Metro Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amada Co and Metro Pacific Investments, you can compare the effects of market volatilities on Amada and Metro Pacific 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 Amada with a short position of Metro Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amada and Metro Pacific.

Diversification Opportunities for Amada and Metro Pacific

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Amada and Metro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amada Co and Metro Pacific Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Pacific Investments and Amada 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 Amada Co are associated (or correlated) with Metro Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Pacific Investments has no effect on the direction of Amada i.e., Amada and Metro Pacific go up and down completely randomly.

Pair Corralation between Amada and Metro Pacific

If you would invest  4,474  in Amada Co on December 30, 2023 and sell it today you would earn a total of  423.00  from holding Amada Co or generate 9.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Amada Co  vs.  Metro Pacific Investments

 Performance 
       Timeline  
Amada 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Amada Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Amada showed solid returns over the last few months and may actually be approaching a breakup point.
Metro Pacific Investments 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Metro Pacific Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Metro Pacific is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Amada and Metro Pacific Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amada and Metro Pacific

The main advantage of trading using opposite Amada and Metro Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amada position performs unexpectedly, Metro Pacific 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 Metro Pacific will offset losses from the drop in Metro Pacific's long position.
The idea behind Amada Co and Metro Pacific Investments 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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