Correlation Between Filinvest REIT and Philippine National

Can any of the company-specific risk be diversified away by investing in both Filinvest REIT and Philippine National 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 Philippine National 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 Philippine National Bank, you can compare the effects of market volatilities on Filinvest REIT and Philippine National 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 Philippine National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Filinvest REIT and Philippine National.

Diversification Opportunities for Filinvest REIT and Philippine National

0.95

Correlation Coefficient

Filinvest REIT  Philippine National

Almost no diversification

The 3 months correlation between Filinvest and Philippine is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Filinvest REIT Corp and Philippine National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Philippine National Bank 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 Philippine National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Philippine National Bank has no effect on the direction of Filinvest REIT i.e., Filinvest REIT and Philippine National go up and down completely randomly.

Pair Corralation between Filinvest REIT and Philippine National

Assuming the 90 days trading horizon Filinvest REIT is expected to generate 2.41 times less return on investment than Philippine National. But when comparing it to its historical volatility, Filinvest REIT Corp is 3.13 times less risky than Philippine National. It trades about 0.25 of its potential returns per unit of risk. Philippine National Bank is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  4,820  in Philippine National Bank on May 6, 2025 and sell it today you would earn a total of  1,375  from holding Philippine National Bank or generate 28.53% return on investment over 90 days.

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

Filinvest REIT Corp  vs.  Philippine National Bank

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 19 (%) 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 September 2025.

Philippine National Bank

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Philippine National Bank are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Philippine National exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Filinvest REIT and Philippine National

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

The idea behind Filinvest REIT Corp and Philippine National Bank 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.